A flexible spending account (FSA) lets individuals put aside pre-tax dollars to cover qualified medical expenses. Up to $500 in unused funds can roll over into the following plan year. As of 2020, the IRS has established an FSA contribution limit of $2,750 per qualified FSA ($2,700 for 2019)
FSA funds are use it or lose it, and any unused money left over at the end of the year is no longer yours. Unused funds go to your employer, who can split it among employees in the FSA plan or use it to offset the costs of administering benefits.
If any funds remain in your Healthcare FSA at the end of the current plan year, you carry over up to $500 into the subsequent year, indefinitely. Your carryover balance can be used at any time for expenses incurred in the new plan year (in addition to the elected payroll deductions).
FSA Eligible Expenses
FSA Eligible Expenses – Services
- Acupuncture
- Alcoholism and Drug Addiction treatment
- Ambulance services
- Annual physical examination
- Body scan (electronic)
- Chiropractor
- Dental treatments (most)
- Disabled dependent expenses for medical care
- Eye exams
- Eye surgery
- Fertility treatments
- Home for the Intellectually and Developmentally Disabled
- Hospital services (including meals and lodging)
- Laboratory fees (associated with medical care)
- Lead-based paint removal
- Long-term care and services for chronically ill individual
- Nursing home and services
- Organ transplants
- Psychiatric care
- Psychoanalysis
- Psychologist
- Special education
- Therapy
- Transportation expenses for medical treatments and services
- Weight loss program (requires physician’s diagnosis)
- X-ray
FSA Eligible Expenses – Products
- Artificial teeth
- Bandages
- Birth control and contraceptive devices
- Braille reading material
- Breast feeding supplies/lactation expenses
- Capital expenses (home improvements that accommodate a disabled person)
- Communication equipment for the deaf or speech impaired
- Contact lenses and eyeglasses
- Co-pays, co-insurance, and deductibles
- Crutches (purchased or rented)
- Diagnostic devices (blood sugar monitors, blood pressure monitors, etc)
- Guide dog or other service animals
- Hearing aid expenses (batteries, repairs, and maintenance)
- Insulin and diabetic supplies
- Medical Conference expenses (if related to personal chronic illness)
- Menstrual care products
- Over-the-counter (OTC) medications
- Oxygen and oxygen equipment
- Pregnancy test kits
- Prescription drugs and medicine
- Prosthesis (including artificial limbs and breast reconstruction surgery)
- Smoking cessation (OTC medicines and treatment plans)
- Wigs (for hair loss due to disease or medical treatment)
- Vehicular expenses (for operational and design costs that accommodate a disabled person)
- Wheelchairs
NOT FSA Eligible Expenses
- Babysitting, child care or nursing for healthy baby
- Controlled substances (Illegal under federal law, such as marijuana, laetrile, etc)
- Cosmetic surgery not related to a deformity or illness (i.e., facelift, liposuction, etc)
- Dancing lessons
- Diaper services (unless related to effects of disease)
- Electrolysis
- Funeral expenses
- Future medical care
- Hair transplant or removal
- Health club dues
- Household help
- Illegal operations and treatments
- Insurance premiums
- Maternity clothes
- Medicines and pharmaceuticals from another country
- Nutritional supplements
- Swimming lessons
- Teeth whitening
- Veterinary fees (unless for service animal)
| Item | Eligible | Not Eligible |
| Cold and flu medicine (over-the-counter) | X | |
| Condoms | X | |
| Contact lenses and solutions | X | |
| Menstrual Care Products (tampons, pads, liner, cup, sponge, and disposable or non-disposable menstrual undergarments) | X | |
| Sunglasses (over-the-counter) | X | |
| Sunglasses (prescription) | X |