The Internal Revenue Service determines what expenses can be reimbursed with funds from a health care flexible spending account (FSA).
Examples of eligible expenses
- Acupuncture
- Alcohol and drug addiction treatment
- Breast reconstruction surgery
- Dental treatment
- Diagnostic tests and devices
- Doctor’s visits
- Prescriptions
- Eyeglasses, contact lenses and exams
|
- Fertility enhancements
- Hearing aids and batteries
- Operations/surgery (non-cosmetic)
- Nursing services
- Physical therapy
- Psychiatric care
- Smoking cessation
|
> View IRS Publication 502 for a full list
Examples of ineligible expenses
- Cosmetic surgery
- Diaper service
- Electrolysis or hair removal
- Funeral expenses
- Health club dues
- Illegal operations and treatments
- Maternity clothes
- Nutritional supplements
|
- Over-the-counter medicines for which you do not have a doctor's prescription
- Toiletries (e.g. toothbrush, toothpaste)
- Teeth whitening
- Weight loss programs (unless prescribed to treat a specific disease)
|
Tax savings
Consider this example of how a family can save money with a health care FSA.*
Matt, 37, and Jennifer, 36, are married with an 11-year-old daughter. Together, their gross annual income is $75,000, and they file their taxes jointly.
Their estimated health care expenses for the year are:
| Deductibles |
$ 600 |
| Eye exams |
$ 125 |
| Eyeglasses/contacts |
$ 315 |
| Prescriptions |
$ 480 |
| Dental expenses |
$ 200 |
| Orthodontia |
$1,500 |
| Total |
$3,220 |
Matt and Jennifer would save approximately $730 a year if they contributed to an FSA to pay for eligible medical expenses.
|
With an FSA |
Without an FSA |
| Income |
$75,000 |
$75,000 |
| Health care expenses |
($3,220) |
N/A |
| Taxable income |
$52,180 |
$55,400 |
| Estimated taxes |
($7,097) |
($7,580) |
| Estimated Social Security |
($4,450) |
($4,650) |
| Estimated Medicare |
($1,041) |
($1,088) |
| Health care expenses |
N/A |
($3,220) |
| Net pay |
$59,192 |
$58,462 |
A special online store at drugstore.com identifies health care items eligible for reimbursement through HSAs and FSAs. Check your employer's guidelines for eligible expenses if you have an HRA. 
