FSA accounts cover medical, dental, and vision expenses that your insurance doesn't pay

A Flexible Spending Account (FSA) lets you set aside pre-tax money to pay for out-of-pocket healthcare costs. The IRS maintains a specific list of what counts as a may have access to medical expense. If an expense is on that list and your insurance doesn't cover it, your FSA can pay for it. If it's not on the list, your FSA cannot pay for it — even if your doctor recommends it or you think it should be medical.

The rules are strict because FSA money comes with a tax advantage: you don't pay income tax or payroll tax on the money you contribute. In exchange, you can only spend it on things the IRS has pre-approved. Spending FSA funds on anything else means you owe taxes on that money plus a penalty.

Key Takeaways

  • FSA funds cover copays, deductibles, coinsurance, and other amounts your insurance requires you to pay out of pocket.
  • Common covered expenses include prescription medications, dental work, vision care, medical equipment, and over-the-counter items with a doctor's note.
  • Cosmetic procedures, gym memberships, vitamins without a medical condition diagnosis, and general wellness products are not covered.
  • Your FSA plan document and the IRS Publication 502 list the exact expenses your specific account can pay for, since some employers add or remove coverage.

Medical expenses your FSA will pay for

FSA funds cover amounts you owe to doctors, hospitals, and clinics after insurance pays its share. This includes copays (the flat fee you pay at each visit), coinsurance (your percentage of the bill), and deductibles (the amount you must pay before insurance kicks in). If you have a high-deductible health plan, your FSA can cover the full deductible amount.

Prescription medications are covered, as are many over-the-counter medications — but only if you have a doctor's written note saying you need them to treat a diagnosed condition. For example, an FSA can pay for over-the-counter allergy medicine if your doctor documents that you have allergies, but not for a multivitamin you take for general health. Insulin, blood pressure monitors, and other medical supplies for chronic conditions are covered.

Mental health and substance abuse treatment, including therapy sessions and rehabilitation programs, are covered expenses. So are medical equipment like crutches, wheelchairs, hearing aids, and blood pressure cuffs — as long as they treat a specific medical condition, not general wellness.

Dental and vision care covered by FSA

FSA funds cover dental work that treats a medical problem: fillings, root canals, extractions, crowns, and gum disease treatment. Routine cleanings and exams are covered. Orthodontia (braces) is covered in most plans, though some employers exclude it — check your plan document.

Cosmetic dental work is not covered. This means teeth whitening, veneers for appearance only, and cosmetic bonding are not FSA-may be able to access, even if a dentist performs them. The line is whether the work treats disease or damage versus improving appearance.

Vision care includes eye exams, prescription glasses, contact lenses, and contact lens solution. Laser eye surgery (LASIK) is covered. Sunglasses are not covered, even if they have a prescription, because they are considered general eyewear rather than medical correction.

What FSA accounts do not cover

Cosmetic procedures and products are not covered. This includes cosmetic surgery, Botox, dermal fillers, and hair removal treatments done for appearance. If the same procedure can be done for medical reasons (like reconstructive surgery after an accident), the medical version might be covered — but the cosmetic version is not.

General wellness and prevention products are not covered unless they treat a diagnosed condition. Vitamins and supplements are not covered unless your doctor prescribes them to treat a specific deficiency or illness. Gym memberships, fitness classes, and weight loss programs are not covered, even if your doctor recommends them for health reasons. Diets and diet programs are not covered.

Toiletries and hygiene products are not covered: toothpaste, soap, shampoo, deodorant, and feminine hygiene products cannot be paid with FSA funds. Sunscreen is not covered. Over-the-counter pain relievers like ibuprofen are not covered unless you have a doctor's note saying you need them for a diagnosed condition.

Maternity clothes, baby formula, diapers, and childcare are not covered. Household medical equipment like air purifiers or humidifiers is not covered unless prescribed by a doctor to treat a specific respiratory condition — and even then, your plan may exclude it.

How to know if a specific expense is covered

Your employer's FSA plan document lists which expenses are covered under your specific account. Some employers add coverage beyond the IRS minimum or remove coverage that the IRS allows. For example, some plans cover fertility treatments and others do not. Some plans cover certain over-the-counter items and others require a doctor's note for all of them.

The IRS publishes Publication 502, which lists all may have access to medical expenses. You can read it on the IRS website. If an expense is in Publication 502 and your plan document does not exclude it, it is covered. If it is not in Publication 502, it is not covered, regardless of what your employer or your doctor says.

When you are unsure, ask your FSA plan administrator before you spend the money. Most FSA administrators have a phone line and a website where you can submit questions about specific expenses. Getting written confirmation that an expense is covered protects you if the IRS later questions the spending.

Frequently Asked Questions

Can I use my FSA to pay for my spouse's or child's medical expenses?

Yes. FSA funds can pay for medical expenses of you, your spouse, and your dependents — anyone you claim on your tax return. The expense must still be a may have access to medical expense; it does not matter who receives the care.

Does my FSA cover prescription glasses and contact lenses?

Yes. Prescription eyeglasses, contact lenses, contact lens solution, and eye exams are all covered. Sunglasses are not covered, even with a prescription, because they are not considered medical correction.

Can I use FSA money for over-the-counter medications without a doctor's note?

It depends on your plan. Some plans cover over-the-counter medications without a note; others require a doctor's written statement that you need the medication to treat a diagnosed condition. Check your plan document or call your FSA administrator to find out which rule applies to you.

Is therapy or mental health treatment covered by FSA?

Yes. Copays and coinsurance for therapy, counseling, and psychiatric care are covered. Substance abuse treatment and rehabilitation programs are also covered expenses.

What happens if I spend FSA money on something that is not covered?

You owe income tax and payroll tax on that money, plus a 20 percent penalty. The IRS may assess this if they audit your account or if your FSA administrator flags the spending. Keep receipts and documentation so you can show that expenses were covered if questioned.