A Quick List of FSA Eligible Expenses
A Quick List of FSA Eligible Expenses
Flexible Spending Accounts (FSA) are tax-advantaged savings accounts that allow employees to put away a portion of their gross income (before taxes, Social Security contributions and other payroll deductions) to pay for certain healthcare expenses not covered by their health insurance plans. It’s almost like getting a discount on these costs and items, because you’re using pretax dollars. For related reading, see Healthcare FSAs Increase Your Personal Savings.
FSA account limits
Participants may put up to $2,550 into an FSA account every year;
these savings must generally be utilized within that plan year. However,
an employer may offer either a grace period
of up to 2.5 months to utilize all FSA funds for that year, or they may
allow employees to carry over a maximum of $500 into the following
year.
At the end of the year or grace period, any remaining money in the
FSA savings is, in effect, forfeited. Given that the utilization time
frame is so limited, it’s important to plan (as much as is possible) for
out-of-pocket health expenses, to ensure savings are intelligently spent and don’t go to waste. For some tips, see 7 Last-Minute Ways To Spend Your FSA Dollars.
Which Expenses Qualify?
Eligible health care expenses are essentially those that relate to
medical care (e.g., general medical, vision, dental and pharmaceutical),
or costs required to prevent or treat physical or mental illness or
defect. Here's a handy checklist.
A
Acupuncture; alcohol and drug treatment; allergy relief (related
medicines and shots); ambulance service; arch supports; artificial limbs
and teeth
B
Back brace; birth control/ family planning; blood pressure monitor;
body scans; braces and other orthodontics; braille reading materials;
breast pumps and related supplies; breast reconstruction surgery;
breathalyzers
C
Carpal tunnel wrist supports; childbirth-related (such as home
pregnancy tests, midwife fees and childbirth prep classes); contact
lenses and lens cleaners; crutches
D
Doctor fees (including anesthesiologist, chiropodist, chiropractor,
Christian Science practitioner, dentist, dermatologist, gynecologist,
naturopath, neurologist, obstetrician, oculist, oncologist,
ophthalmologist/optometrist, optician, orthopedist, osteopath,
otorhinolaryngologist, pediatrician, physician, podiatrist,
psychiatrist, physiotherapist)
E
Eyeglasses and eye care
F
Facilities (such as hospital, nursing home, rehabilitation facilities); fertility treatments
H
Health screenings; hearing exams and aids; hormone replacement therapy; hospital fees
I
Incontinence supplies; insurance co-pays and deductibles
L
Laboratory fees; lodging (such as hospital or nursing home, or hotel/motel room required for away-from-home treatment)
M
Massage therapy; maternity; medical expenses incurred outside the U.S.
N
Nursing homes; nursing services
O
Organ or tissue transplants; orthodontics; oxygen (tanks and equipment)
P
Patterning exercises; prescribed drugs and medicines; prosthesis; psychiatric care
R
Rehydration products
S
Service animals for disabled individuals; speech therapy;
sterilization (vasectomy and tubal ligation, and reversal); surgery
(non-cosmetic)
T
Transportation for medical care
V
Varicose vein treatment
W
Wheelchair
X
X-ray fees
Note: The list provided above is merely a guide; individual plans may vary.
Which Expenses Don't Qualify?
Items or services purchased merely to benefit general health (gym
membership and vitamins, for instance); for personal purposes (hygiene
products or a vacation) or that are cosmetic in nature (including
surgical procedures, injections, etc.) can't be covered out of an FSA.
However, if the cosmetic surgery is aimed at correcting or improving a
disfiguring disease or birth defect, or some sort of accident-related
scar or disfigurement, it may be eligible.
The Bottom Line
FSA accounts offer a great way to cover a long list of qualifying
health care costs that would otherwise leave you well out of pocket.
Make sure you keep annual time limits and grace periods in mind when
planning how to best utilize savings, and ensure your planned expenses
do in fact qualify. To determine how much money you should contribute to
your account, you can use an FSA calculator.
Eligible expenses can vary according to your healthcare plan, so always
check your employer’s plan document for the fine print regarding your
particular FSA.
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