When it comes to flexible spending account (FSA) funds, there are thousands of FSA-eligible medical, dental, and vision items available for purchase. Everything from routine doctor visits, physical therapy, and lab work, to bandages, first aid supplies, and thermometers. Over-the-counter treatments containing a drug or medication are also FSA-eligible, but will require a prescription, letter of medical necessity, or doctor’s directive.
The Health Care FSA allows enrolled participants to set aside pre-tax money for eligible medical expenses that would normally be paid for using personal funds. If an FSA is paired with a health savings account (HSA), the FSA funds are then limited to dental and vision expenses only. This is called a limited purpose FSA. And even though it has “limited” in the name, there are an abundance of eligible dental and vision items and services available!
In helping FSA enrollees put their funds to good use, there are also items and services that are not generally eligible for tax-free purchases. Ineligible items include, but are not limited to: cosmetic surgery, teeth whitening, insurance premiums, maternity clothes, and exercise equipment.
Another type of FSA, called a Dependent Care FSA (also recognized as “Dependent Care Assistance Program” or “DCAP”), sets aside pre-tax funds to help cover care for children or other eligible dependents while parents work, look for work, or attend school on a full-time basis. Eligible care includes: care of a child under age 13 at a day camp, nursery school, or by a private sitter for a child that lives in the home at least eight hours a day; before- and after-school care (but not tuition); care of an adult with a disability who lives with the enrollee at least eight hours a day; and expenses for an in-home care provider, such as a babysitter or au pair, whose duties include caring for an eligible dependent.