If you have a Flexible Spending Account (FSA) through your employer, it may cover more out-of-pocket health care expenses allowed by the IRS than you realize. With an FSA, you set aside tax-free money from your paycheck to pay for deductibles, copayments, and prescription drugs. But standard FSAs also cover a long list of additional health-related services and products, including over-the-counter drugs (from allergy meds, antacids, and aspirin to cold medicines and laxatives), eyeglasses, sunscreen, mouthguards (for tooth grinding), condoms and other contraceptives, air filters, blood pressure monitors, some dietary supplements, shoe inserts, athletic braces, eye exams, and walking and hearing aids.
You may even be able to use your “flex dollars” to pay for exercise equipment, health club dues, dental veneers, car modifications, acupuncture, medical massage therapy, smoking cessation counseling, addiction treatment, and more.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed in 2020, expanded how you can use your FSA funds. For instance, you can now (finally) buy menstrual products with FSA dollars. But some items still require you to submit a doctor’s prescription or Letter of Medical Necessity signed by your doctor to verify that the expense is medically necessary for a specific medical condition. And many items may still not be covered, such as toothbrushes, tooth-whitening products, deodorant, diapers, cosmetics and cosmetic procedures, hair regrowth products, insect repellent, hand lotion, sunglasses, and one-a-day-type vitamins.
The IRS and WageWorks provide lists of eligible and non-eligible expenses. Because the lists are subject to change and may vary by plan, it’s best, however, to check with your plan’s administrator or on your plan’s website before making a purchase you think will be covered. You can also shop online for FSA-eligible products. Other tax-advantaged plans that help offset health care costs are Health Savings Accounts (HSAs) and Medical Savings Accounts (MSAs). The IRS provides explanations of these plans here.
