FSA money covers medical costs that your insurance doesn't pay for

A Flexible Spending Account (FSA) lets you set aside pre-tax dollars to pay for out-of-pocket medical expenses. The IRS maintains a specific list of what counts as a medical expense, and only those items can be purchased with FSA funds. If you try to buy something not on the list, you'll owe taxes on that money plus a 20% penalty.

The key difference from an HSA is that FSA money must be spent in the same calendar year you contribute it — there's no rollover to next year (with rare exceptions). This means you need to think carefully about what you'll actually use before you elect your FSA amount during open enrollment.

Key Takeaways

  • FSA funds cover copays, deductibles, prescription medications, and medical equipment like glasses and hearing aids.
  • Over-the-counter items like pain relievers, allergy medicine, and cold medicine now count as FSA-may be able to access without a prescription.
  • Dental and vision care — including cleanings, fillings, exams, and glasses — are covered by FSA money.
  • Mental health services, therapy, and psychiatric care are FSA-may be able to access expenses.
  • FSA money cannot be used for cosmetic procedures, gym memberships, vitamins, or general wellness products unless prescribed by a doctor.

Prescription medications and over-the-counter drugs

Any prescription medication your doctor writes is FSA-may be able to access, regardless of what it treats. This includes birth control, psychiatric medications, diabetes supplies, and inhalers. You pay with your FSA debit card at the pharmacy, or you can pay out of pocket and submit a receipt for reimbursement later.

Over-the-counter medications are also covered now, but the rules changed in 2020. You can use FSA funds for pain relievers (ibuprofen, acetaminophen), allergy medicine, cold and flu medicine, antacids, and anti-diarrheal medication without needing a prescription. You do not need a doctor's note — the medication itself just has to be FDA-approved and not a cosmetic product.

Vitamins and supplements are generally not FSA-may be able to access unless a doctor prescribes them to treat a specific medical condition. A multivitamin for general health does not count. If your doctor writes a prescription for a specific vitamin to address a deficiency, that becomes may be able to access.

Medical equipment, devices, and supplies

FSA funds cover the cost of medical equipment your doctor says you need. This includes eyeglasses, contact lenses, hearing aids, crutches, wheelchairs, blood pressure monitors, and glucose meters. You can also use FSA money for the supplies that go with these devices — contact lens solution, hearing aid batteries, lancets for blood testing, and test strips.

Dental equipment like a water flosser or electric toothbrush is not FSA-may be able to access on its own, because these are considered general wellness items. However, if your dentist prescribes a specific device to treat gum disease or another condition, it may become may be able to access — ask your dentist to document the medical reason.

Braces, retainers, and other orthodontic devices are covered. So are prosthetics, orthopedic shoes, and compression stockings prescribed for a medical condition. The rule is consistent: if a doctor says you need it to treat or manage a health condition, it usually counts.

Dental and vision care

Routine dental visits, cleanings, and exams are FSA-may be able to access. So are fillings, root canals, crowns, extractions, and gum disease treatment. Orthodontics — braces and retainers — are covered. Teeth whitening is not covered because it's considered cosmetic, even if done by a dentist.

Vision care includes eye exams, glasses, contact lenses, and contact lens solution. Laser eye surgery (LASIK or PRK) is FSA-may be able to access. Sunglasses are not, even if they're prescription, because they're considered a general accessory rather than a medical device.

Mental health and therapy services

Therapy, counseling, and psychiatric care are all FSA-may be able to access. This includes sessions with a therapist, psychologist, or psychiatrist, whether in person or telehealth. Medication prescribed by a psychiatrist is also covered. You pay the copay or full cost with your FSA debit card, or you can pay out of pocket and submit an invoice for reimbursement.

Some employers offer mental health apps or meditation programs as part of their benefits. Whether these are FSA-may be able to access depends on whether they're prescribed by a healthcare provider for treatment of a diagnosed condition. General wellness apps are not covered.

Copays, deductibles, and coinsurance

You can use FSA funds to pay any copay or coinsurance amount your insurance plan requires. If your plan has a $1,500 deductible and you've met $800 of it, you can use FSA money to pay the remaining $700. This is one of the most common uses of FSA accounts — it reduces the amount of after-tax money you have to spend on medical care.

You cannot use FSA money to pay your insurance premiums themselves. However, if you have a Health Savings Account (HSA) instead of an FSA, HSA funds can be used for premiums in specific situations — like COBRA continuation coverage or long-term care insurance.

What FSA money cannot buy

Cosmetic procedures are not covered, even if performed by a medical provider. This includes teeth whitening, Botox, hair removal, and cosmetic surgery. The exception is if the procedure is medically necessary — for example, reconstructive surgery after an accident or burn.

General wellness items are not FSA-may be able to access: gym memberships, fitness classes, general vitamins, and wellness supplements. Sunscreen, toothpaste, and soap are not covered. Maternity clothes, diapers, and baby formula are not covered. Over-the-counter items that are not drugs or medical devices — like bandages, pain relief patches, or heating pads — fall into a gray area and may not be covered depending on how they're classified.

Services that are not medically necessary are not covered. This means you cannot use FSA funds for cosmetic dentistry, elective procedures, or treatments your insurance considers experimental. If you're unsure whether something is covered, contact your FSA plan administrator with the specific item or service — they can tell you whether it's may be able to access before you spend the money.

How to know if something is FSA-may be able to access before you buy

Your FSA plan administrator provides a list of may be able to access expenses, usually on their website or in your plan documents. You can also call them directly with a specific question — they're used to these calls and can give you a yes or no answer quickly.

If you're buying something at a pharmacy or medical supply store, the cashier may know whether it rings up as FSA-may be able to access. Some items are coded in the system as may be able to access and some are not, regardless of what the product actually is. If the register rejects your FSA card, that's a sign the item isn't covered.

Keep all receipts for FSA purchases. If you pay out of pocket and want to be reimbursed later, you'll need to submit the receipt to your plan administrator along with a claim form. Some plans have a mobile app where you can photograph and upload receipts directly.

Frequently Asked Questions

Can I use my FSA for my spouse's or children's medical expenses?

Yes. FSA funds can be used for medical expenses of you, your spouse, and your dependents — including adult children if they're claimed as dependents on your tax return. You don't have to be on the same insurance plan; the FSA just has to be in your name.

What happens if I don't spend all my FSA money by the end of the year?

Most FSA plans have a "use-it-or-lose-it" rule: money not spent 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 for someone else's medical care if they're not my dependent?

No. FSA funds can only be used for expenses of you, your spouse, and your tax dependents. You cannot use FSA money to pay for a parent's or adult child's medical care unless they're claimed as your dependent on your tax return.

Are prescription glasses and contacts covered by FSA?

Yes. Prescription eyeglasses, contact lenses, and contact lens solution are all FSA-may be able to access. Eye exams are also covered. Non-prescription sunglasses are not covered, even if they're purchased from an eye care provider.

Can I use FSA funds for telehealth visits?

Yes. Telehealth appointments with doctors, therapists, and other healthcare providers are FSA-may be able to access. You can use your FSA debit card to pay the provider directly, or pay out of pocket and submit an invoice for reimbursement.