What an FSA covers
A Flexible Spending Account (FSA) lets you set aside pre-tax money for medical costs that your health insurance does not cover. The IRS publishes a list of what counts as a may have access to medical cost, and it is longer than most people expect — it includes things like copays, deductibles, prescription drugs, and dental work, but also items like crutches, hearing aids, and certain over-the-counter medicines.
The key rule is this: the cost must be for diagnosis, treatment, or prevention of a medical condition, and it cannot be something your insurance already pays for. If your plan covers it, you cannot use FSA money on top of that. But if your plan does not cover it, or you have not met your deductible yet, FSA money can pay for it.
You cannot use FSA money for cosmetic procedures, gym memberships, vitamins (unless prescribed by a doctor), or most over-the-counter items — though there are exceptions for things like pain relievers and allergy medicine if you have a prescription or a letter from your doctor saying you need them.
Key Takeaways
- FSA money covers copays, deductibles, prescription drugs, dental work, vision care, and medical equipment like crutches or hearing aids.
- Over-the-counter medicines and medical supplies are covered only if you have a prescription or a doctor's letter stating medical necessity.
- You cannot use FSA funds for cosmetic procedures, gym memberships, or general wellness items like vitamins without a prescription.
- The IRS maintains the official list of may have access to expenses, and your FSA plan documents will tell you which items your specific employer plan covers.
- FSA money must be used in the same calendar year it is set aside, or you lose it — there is no rollover to the next year.
Medical care and treatment costs
FSA money covers the out-of-pocket costs you pay to doctors, hospitals, and clinics. This includes copays when you see your primary care doctor, specialist visits, urgent care, and emergency room visits. It also covers coinsurance — the percentage of a bill you pay after your insurance pays its share — and any costs above your deductible before insurance kicks in.
Prescription medications are a major FSA use. You can pay for any prescription drug your doctor writes, whether your insurance covers it or not. If your insurance does cover a drug but you choose a brand-name version instead of the generic, you can use FSA money for the difference.
Mental health and therapy visits are covered. If you pay out of pocket for a therapist, psychiatrist, or counselor, FSA money can cover that cost. The same applies to substance abuse treatment programs.
Dental and vision expenses
Dental work is one of the largest FSA expenses for many people. You can use FSA money for cleanings, fillings, root canals, crowns, extractions, and orthodontia like braces. You can also pay for dentures, bridges, and implants. If your dental insurance has a waiting period before it covers major work, FSA money can bridge that gap.
Vision care includes eye exams, glasses, contact lenses, and contact lens solution. You can use FSA funds to pay for LASIK surgery or other corrective procedures. If you need a new prescription, the exam and the frames or contacts all count.
Medical equipment and supplies
FSA money covers durable medical equipment — items your doctor says you need for a medical condition. This includes crutches, wheelchairs, walkers, canes, hearing aids, and blood pressure monitors. It also covers diabetic supplies like test strips, lancets, and glucose monitors. Pregnancy tests, ovulation kits, and fertility-related medical supplies are covered.
Bandages, gauze, elastic wraps, and other wound care supplies count. So do heating pads, ice packs, and compression sleeves if they are prescribed for a medical condition. Sunscreen is not covered unless it is prescribed as part of treatment for a skin condition.
Medical alert systems and devices that monitor your health are covered. Breast pumps and related supplies for nursing mothers are covered. Wigs used to treat hair loss from a medical condition (like chemotherapy) are covered.
Over-the-counter medicines and when they count
The rules for over-the-counter (OTC) items changed in 2020. Now, most OTC medicines require a prescription or a written statement from your doctor saying you need them for a medical condition. This applies to pain relievers, allergy medicine, cold medicine, antacids, and anti-diarrheal drugs.
There are exceptions. Insulin does not require a prescription to be FSA-may be able to access — you can buy it over the counter and use FSA money. Feminine hygiene products (pads, tampons, menstrual cups) became FSA-may be able to access in 2021 and do not require a prescription.
If you want to use FSA money for an OTC medicine, ask your doctor to write a prescription for it, or ask them to write a letter on their letterhead stating that you have a medical condition and need that specific product. Keep that letter with your receipts in case your FSA plan asks for proof.
What FSA money cannot cover
Cosmetic procedures are not covered, even if they are performed by a medical professional. This includes teeth whitening, Botox, facelifts, and hair removal. However, if a procedure is medically necessary — for example, reconstructive surgery after an accident or as part of cancer treatment — it may be covered.
General wellness and prevention items are not covered. Gym memberships, fitness classes, and sports equipment do not count, even if your doctor recommends exercise. Vitamins and supplements are not covered unless your doctor prescribes them for a specific deficiency or condition.
Cosmetic dentistry like teeth whitening or veneers is not covered. However, if you need a crown or bridge for a tooth that is broken or decayed, that is covered. The line is whether the work is necessary to treat a condition or purely for appearance.
Long-term care insurance, life insurance, and disability insurance premiums are not covered. Travel to get medical treatment is not covered, though the medical treatment itself is. Maternity clothes are not covered, but the medical care during pregnancy is.
How to know what your plan covers
Your employer's FSA plan document will list what is and is not covered under your specific plan. Some employers choose to cover fewer items than the IRS allows, so you need to check your plan, not just the IRS list. Your FSA administrator — the company that manages the account for your employer — can tell you whether a specific item is covered before you spend the money.
Most FSA administrators have a searchable database on their website or a customer service line you can call with questions about specific products. If you are unsure, ask before you buy. If you buy something and it turns out not to be covered, you will have to pay for it out of pocket and cannot get reimbursed from your FSA.
Keep all receipts and documentation. If your FSA plan asks for proof that an expense is medical, you will need the receipt, a prescription, or a doctor's letter. The IRS can audit FSA claims, so having documentation protects you.
Frequently Asked Questions
Can I use my FSA for my spouse or children?
Yes. FSA money can pay for medical costs for you, your spouse, and any dependent children, even if they are not on your health insurance plan. You can also use it for an adult child if you claim them as a dependent on your taxes.
What happens to FSA money I do not use by the end of the year?
Most FSA plans have a "use it or lose it" rule — money you do not spend by December 31 is forfeited. Some employers offer a grace period of up to 2.5 months into the next year, or a carryover of up to $610 (the amount changes yearly). Check your plan documents to see which option your employer offers.
Can I use FSA money to pay my insurance premiums?
No. You cannot use FSA money to pay health insurance premiums, dental insurance premiums, or vision insurance premiums. However, you can use it to pay the out-of-pocket costs once you have insurance — copays, deductibles, and coinsurance.
Do I need a receipt to use my FSA debit card?
It depends on the merchant and your FSA plan. At pharmacies and doctors' offices, the system usually knows it is a medical purchase. At other retailers, you may need to provide a receipt or a prescription to prove the item is medical. Keep receipts for at least three years in case your plan audits your spending.
Can I use FSA money for dental implants or braces?
Yes. Dental implants, braces, orthodontia, and all other dental work are covered by FSA. This includes the cost of the procedure and any follow-up care. If your dental insurance does not cover implants or has a waiting period, FSA money can pay for the full cost.