What can flex spending be used on?
Flexible spending accounts (FSAs) have become increasingly popular among employers as a way to offer employees additional benefits and help them manage their healthcare costs. But what exactly can flex spending be used on? Understanding the eligible expenses can help employees make the most of their FSA and save money on out-of-pocket healthcare expenses.
Flexible spending accounts allow employees to set aside pre-tax dollars from their paycheck to pay for qualified healthcare expenses. These accounts are typically offered as part of a health insurance plan and can be used to cover a variety of costs. Here are some of the most common eligible expenses for flex spending:
1. Prescription medications: Employees can use their FSA to pay for prescriptions, both brand-name and generic, as well as over-the-counter medications that are prescribed by a doctor.
2. Medical supplies: Items such as bandages, crutches, and diabetes testing supplies are eligible for reimbursement through an FSA.
3. Dental and vision care: Many FSAs can be used to cover the cost of dental and vision care, including exams, cleanings, glasses, and contact lenses.
4. Doctor visits: Out-of-pocket costs for doctor visits, such as co-pays and deductibles, can be paid for with funds from an FSA.
5. Prescription eyewear: Employees can use their FSA to pay for glasses or contact lenses, as well as for the frames or lenses themselves.
6. Chiropractic services: Chiropractic treatments and related supplies can be covered by an FSA, provided they are deemed medically necessary.
7. Health insurance premiums: Some FSAs can be used to pay for health insurance premiums, including long-term care insurance and short-term disability insurance.
8. Dependent care: Employees can use their FSA to pay for dependent care services, such as child care or adult day care, for dependents under the age of 13 or for disabled dependents of any age.
It’s important to note that not all expenses are eligible for flex spending. For example, expenses such as gym memberships, massage therapy, and non-prescription over-the-counter medications are typically not covered. Additionally, the IRS has specific guidelines for what qualifies as a healthcare expense, and these guidelines can vary from year to year.
Employees should consult their employer’s FSA plan details to understand the specific rules and limitations of their account. By taking advantage of their FSA, employees can reduce their taxable income and save money on healthcare costs, making it a valuable benefit for both employers and employees.
