What a Flexible Spending Account covers
A Flexible Spending Account (FSA) lets you set aside pre-tax money for medical costs that your health insurance doesn't cover. The IRS maintains a specific list of what counts as a medical cost, and only items on that list can be purchased with FSA funds. If you buy something not on the list, you'll owe taxes on that money plus a penalty.
The basic rule: an expense counts if it's for diagnosis, cure, mitigation, treatment, or prevention of disease, or if it affects any part of your body's structure or function. That covers far more than just doctor visits — it includes dental work, vision care, mental health treatment, and many over-the-counter items.
Key Takeaways
- FSA funds cover doctor visits, prescriptions, dental work, vision care, and mental health treatment, but only if they treat a medical condition or prevent disease.
- Many over-the-counter items count — bandages, pain relievers, allergy medicine, and diabetic supplies — but cosmetic products like sunscreen and toothpaste do not.
- The IRS list changes occasionally, and your plan may be more restrictive than the IRS allows, so check your plan documents before spending.
- Gym memberships and general wellness programs don't count, even if they improve your health, because they're not treating a specific condition.
- You can use FSA funds for family members on your plan, including spouses and children, as long as you claim them as dependents on your taxes.
Medical services and provider visits
Doctor visits, hospital stays, surgery, and mental health counseling all count. This includes copays, coinsurance, and deductibles you owe to your provider. If your insurance requires you to pay part of the bill, FSA funds can cover your share.
Dental and vision care are covered too — cleanings, fillings, root canals, eyeglasses, contact lenses, and eye exams all may have access to. Orthodontia (braces) counts as well. The key is that the service must be provided by a licensed practitioner treating a medical or dental condition.
Prescription and over-the-counter medications
Prescription medications always count. Over-the-counter drugs count only if you have a prescription from your doctor — even if it's for something you could buy without one. A doctor's note saying "use ibuprofen for arthritis" is enough; you don't need a formal prescription pad.
Common over-the-counter items that count with a prescription include pain relievers, allergy medicine, cold medicine, antacids, and anti-diarrheal medication. Insulin and other diabetic supplies count without a prescription because the IRS treats them as medical devices, not drugs.
Items that do not count include vitamins (unless prescribed to treat a specific deficiency), supplements, and herbal remedies. Sunscreen, toothpaste, and mouthwash don't count because they're considered cosmetic or general hygiene products, even though they may prevent problems.
Medical equipment and supplies
Crutches, wheelchairs, hearing aids, blood pressure monitors, thermometers, and bandages all count. Diabetic testing supplies — strips, lancets, and meters — are covered. Elastic bandages, heating pads, and ice packs for injury treatment count. Pregnancy tests and ovulation kits count because they're used to detect a medical condition.
The distinction is between treatment and general wellness. A humidifier for a respiratory condition counts; a humidifier for comfort does not. A back brace prescribed by a doctor counts; a generic back support for posture does not. If you're unsure, ask your doctor to document that the item treats a specific condition.
Mental health and therapy services
Therapy, counseling, and psychiatric care all count, including copays and any portion of the bill you owe. This covers in-person visits, telehealth appointments, and group therapy sessions. Substance abuse treatment programs count as well.
The service must be provided by a licensed mental health professional — a therapist, counselor, psychiatrist, or psychologist. Self-help books, meditation apps, and wellness coaching generally do not count unless they're part of a treatment plan prescribed by a licensed provider.
What does not count
Gym memberships, fitness classes, and general wellness programs don't count, even if they improve your health. Cosmetic procedures — teeth whitening, Botox, hair removal — don't count unless they're medically necessary (for example, reconstructive surgery after an accident). Cosmetic dentistry like veneers doesn't count.
Toiletries and hygiene products don't count: toothpaste, mouthwash, shampoo, soap, deodorant, and cosmetics are all considered personal care, not medical treatment. Long-term care insurance premiums don't count. Maternity clothes don't count. Childcare and babysitting don't count, even if you need them to attend a medical appointment.
Travel costs to medical appointments — gas, airfare, hotel — don't count. However, if you're admitted to a hospital or treatment facility, lodging as part of that treatment may count. Check your plan or ask the provider.
How to verify what your plan covers
Your FSA plan documents list what your specific employer's plan covers. The IRS allows items on its list, but your employer can be more restrictive. Some plans exclude certain over-the-counter items or have different rules for family members.
Before you spend, check your plan summary or call your FSA administrator — the company managing the account. They can tell you whether a specific item is covered under your plan. Many FSA administrators have online lists or a phone line for this question. Keeping receipts and documentation is important: if the IRS audits your account, you'll need to show what you bought and why it was medical.
Frequently Asked Questions
Can I use FSA money for my spouse or children?
Yes, if they're covered under your health plan and you claim them as dependents on your taxes. You can use FSA funds for their medical expenses the same way you use them for your own. If your spouse has their own FSA through their employer, they should use their own account first.
Do I need a prescription for over-the-counter medicine to use FSA funds?
For most over-the-counter drugs, yes — you need a doctor's note or prescription. Insulin and diabetic supplies are the main exception; they count without a prescription. If you're unsure about a specific item, ask your doctor to write a note saying you should use it to treat your condition.
What happens if I buy something that's not covered?
If you use FSA funds for a non-covered item, you'll owe income tax on that amount plus a 20% penalty. Keep receipts so you can prove what you bought. If you realize you made a mistake, contact your FSA administrator — some plans allow you to request a reversal or correction.
Does my FSA cover dental and vision care?
Yes, dental and vision care count as medical expenses. This includes cleanings, fillings, root canals, eyeglasses, contacts, and eye exams. However, cosmetic dental work like veneers or teeth whitening doesn't count unless it's medically necessary.
Can I use FSA funds for preventive care like vaccines?
Yes. Vaccines, annual physicals, and screening tests all count because they prevent or detect disease. You can use FSA funds for your copay or any portion of the cost you owe. Many preventive services are covered at no cost by insurance, but if you owe anything, FSA funds can cover it.