What a Flexible Spending Account Covers

A Flexible Spending Account (FSA) lets you set aside pre-tax money from your paycheck to pay for certain medical and dependent care costs. The IRS maintains a specific list of what counts as an may be able to access expense, and only those items can be purchased with FSA funds without tax consequences. If you buy something that isn't on that list, you'll owe income tax plus a 20% penalty on the amount you withdraw.

The may be able to access expenses fall into two main categories: medical care and dependent care. Most people use FSAs for medical expenses because the list is longer and covers things you're already paying for anyway. Dependent care FSAs work differently and have their own rules about what qualifies.

Key Takeaways

  • Medical FSAs cover doctor visits, prescriptions, dental work, vision care, and medical equipment, but not insurance premiums or cosmetic procedures.
  • Over-the-counter medications and supplies now count as may be able to access expenses, but only if you have a prescription or doctor's note for them.
  • Dependent care FSAs pay for daycare, preschool, and after-school care for children under 13, but not for school tuition or overnight camps.
  • You must use FSA money within the plan year or lose it — there is no rollover, though some employers offer a grace period of up to 2.5 months.
  • The IRS publishes the complete list of may be able to access expenses, and your plan document should specify which ones your employer's plan covers.

Medical Expenses That may have access to

Medical FSAs cover a broad range of healthcare costs. This includes doctor office visits, urgent care, emergency room visits, hospital stays, and surgery. Prescription medications are may be able to access, as are insulin and other diabetes supplies. Dental work — fillings, cleanings, root canals, orthodontia — all count. Vision care including eye exams, glasses, contact lenses, and laser eye surgery also qualifies.

Medical equipment and supplies are may be able to access if they treat or prevent a medical condition. This covers items like crutches, wheelchairs, hearing aids, blood pressure monitors, glucose meters, and nebulizers. Mental health treatment, including therapy and psychiatric medications, counts as a medical expense. Physical therapy, chiropractic care, and acupuncture are may be able to access if a doctor recommends them.

Over-the-counter medications and supplies now count as may be able to access expenses, but with a catch: you need a prescription or a written note from your doctor stating that the item is medically necessary. This applies to pain relievers, allergy medications, antacids, cold medicine, and similar items. Bandages, first aid supplies, and heating pads also may have access to under the same rule.

What Medical FSAs Do Not Cover

Health insurance premiums themselves are not may be able to access for FSA reimbursement, even though you're paying them from your paycheck. This includes your share of employer health insurance, Medicare premiums, and supplemental insurance. However, some long-term care insurance premiums may be may be able to access under specific circumstances — check your plan document.

Cosmetic procedures and products are not covered unless they treat a medical condition. Teeth whitening, hair removal, and anti-wrinkle treatments are cosmetic. However, reconstructive surgery after an injury or illness does count. Vitamins and supplements are generally not may be able to access unless your doctor prescribes them to treat a specific medical condition and documents that in writing.

Gym memberships and general wellness programs are not may be able to access, even if your employer markets them as health-related. Maternity clothes, general toiletries, and sunscreen for sun protection (rather than treatment of a skin condition) do not may have access to. Weight loss programs and diet foods are not covered unless prescribed by a doctor to treat obesity as a medical condition.

Dependent Care Expenses That may have access to

Dependent care FSAs pay for the cost of caring for your children under age 13 while you work. This includes daycare centers, in-home daycare providers, nannies, and babysitters. Preschool and pre-K programs count if their primary purpose is childcare while you're working, not education. After-school care and summer day camps also may have access to.

The person or facility providing care does not need to be licensed in all cases, but they cannot be a relative you claim as a dependent on your taxes. If your spouse stays home to care for your child, that expense does not may have access to. The dependent care FSA is designed to cover costs only while you and your spouse (if married) are both working or in school.

Dependent Care Expenses That Do Not may have access to

School tuition and educational programs are not covered by dependent care FSAs, even for preschool. The distinction is whether the primary purpose is childcare or education — if it's a school setting focused on academics, it doesn't count. Overnight camps, sleep-away camps, and camps that combine education with care are not may be able to access.

Babysitting for social events, date nights, or entertainment does not may have access to. The care must occur while you are working or in school. Expenses for a child age 13 or older are not covered, even if they need supervision after school. Tuition for K-12 schools and college is never may be able to access under a dependent care FSA.

How to Know What Your Specific Plan Covers

The IRS maintains the master list of may be able to access expenses, but individual employers can be more restrictive. Your plan document — usually called a Summary Plan Description or SPD — will tell you exactly which may be able to access items your employer's FSA covers. Some employers exclude certain categories even though the IRS allows them. For example, some plans don't cover chiropractic care or acupuncture, even though the IRS does.

Your FSA administrator (the company that manages the account for your employer) can answer questions about what your specific plan covers. They usually have a website with a searchable list of may be able to access expenses and a customer service number. Before you make a large purchase, it's worth calling to confirm — a denied reimbursement means you'll owe the tax and penalty on that amount.

The Use-It-or-Lose-It Rule and How to Plan

FSA money must be used within the plan year or you forfeit it. There is no rollover to the next year, which is why FSAs require careful planning. Most plan years run January through December, though some employers use different dates. You forfeit any money you don't spend by the important date, and that money goes back to your employer.

Some employers offer a grace period of up to 2.5 months after the plan year ends — so you might have until March 15 to spend money from the prior year. A few employers allow a carryover of up to $610 (the amount changes yearly) into the next plan year, but this is less common. Check your plan document to see if either option applies to you. If not, the safest approach is to set aside only the amount you're confident you'll spend in that year.

Frequently Asked Questions

Can I use my FSA to buy sunscreen or bug spray?

Sunscreen for general sun protection is not covered. However, if a dermatologist prescribes sunscreen to treat a skin condition like rosacea or photosensitivity, and provides written documentation, it may be may be able to access. Bug spray for general use is not covered. The key is whether a doctor prescribed it to treat a specific medical condition.

Are prescription glasses and contacts covered?

Yes. Eye exams, glasses, contact lenses, and contact lens solution are all may be able to access medical expenses under an FSA. Laser eye surgery (LASIK) is also covered. You can use your FSA debit card or submit a receipt for reimbursement.

What happens if I use my FSA card for something that turns out to be ineligible?

You'll owe income tax on that amount plus a 20% penalty. The FSA administrator may catch it during a claims audit and deny the reimbursement, or you may discover it during tax time. Keep receipts and documentation so you can prove what you bought if questions arise.

Can I use dependent care FSA money for my 14-year-old's after-school program?

No. Dependent care FSAs only cover children under age 13. Once your child turns 13, that expense is no longer may be able to access, even if they still need supervision while you work.

If I don't spend all my FSA money by the important date, can I get it back?

No. Unspent FSA money is forfeited and returned to your employer. This is the "use-it-or-lose-it" rule. Some plans offer a grace period of up to 2.5 months after the plan year ends, which gives you extra time to spend the money. Check your plan document to see if this applies to you.