What can you spend FSA funds on?
Flexible Spending Accounts (FSAs) are a popular employee benefit that allows individuals to set aside pre-tax dollars to pay for qualified medical expenses. Understanding what you can spend FSA funds on is crucial to maximizing the benefits of this tax-advantaged account. Here’s a comprehensive guide to the eligible expenses that you can use your FSA funds for.
Qualified Medical Expenses
The primary purpose of an FSA is to cover qualified medical expenses. These include costs that are not typically covered by health insurance, such as:
– Prescription medications
– Over-the-counter (OTC) medications with a prescription
– Contact lenses and solution
– Vision care services, including eye exams and glasses
– Dental care services, including cleanings, fillings, and braces
– Hearing aids and hearing aid maintenance
– Co-pays and deductibles for medical services and prescriptions
Dependent Care Expenses
FSAs can also be used to cover dependent care expenses for qualifying dependents under the age of 13. Eligible expenses include:
– Daycare or babysitting services
– Before- and after-school programs
– Summer day camps
– Adult day care for elderly or disabled dependents
Health Insurance Premiums
Some FSAs allow you to use funds to pay for health insurance premiums. This includes:
– Individual health insurance premiums
– Long-term care insurance premiums
– Health savings account (HSA) premiums
Transportation Expenses
FSAs can be used to cover certain transportation expenses related to medical care. This includes:
– Public transportation costs to and from a medical appointment
– Parking fees at the medical facility
– Taxi or ride-sharing services to and from a medical appointment
Telehealth Services
With the rise of telehealth, many FSAs now cover telehealth services. This includes:
– Virtual consultations with healthcare providers
– Telemedicine services
– Mental health counseling via telehealth
Eligible Over-the-Counter (OTC) Medications
While most OTC medications are not eligible for FSA funds, some are. To be eligible, the medication must be prescribed by a healthcare provider. Common eligible OTC medications include:
– Pain relievers, such as ibuprofen or acetaminophen
– Antacids
– Allergy medications
– Diabetic testing supplies
Understanding Eligibility and Limits
It’s important to note that not all expenses are eligible for FSA funds. Always check with your employer or FSA administrator for a complete list of eligible expenses. Additionally, FSAs have annual contribution limits, and funds that are not used by the end of the plan year may be forfeited. Plan your expenses carefully to ensure you make the most of your FSA funds.
Conclusion
Understanding what you can spend FSA funds on is essential for making the most of this valuable employee benefit. By utilizing your FSA funds for eligible medical, dependent care, and transportation expenses, you can save money on taxes and reduce out-of-pocket costs. Always consult your employer or FSA administrator for specific details and guidelines regarding your FSA account.
