Qualified medical expenses for FSAs
The Internal Revenue Service determines what expenses can be reimbursed with funds from a health care flexible spending account (FSA).
Examples of qualified expenses
- Alcohol and drug addiction treatment
- Breast reconstruction surgery
- Dental treatment
- Diagnostic tests and devices
- Doctor’s visits
- 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 of qualified medical expenses.
Examples of nonqualified 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)
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 $75,000, and they file their taxes jointly.
Their estimated health care expenses for the year are:
|Eye exams||$ 125|
|Dental expenses||$ 200|
Matt and Jennifer would save approximately $730 a year if they contributed to an FSA to pay for qualified medical expenses.
|With an FSA||Without an FSA|
|Health care expenses||($3,220)||N/A|
|Estimated Social Security||($4,450)||($4,650)|
|Health care expenses||N/A||($3,220)|
*This hypothetical example is presented strictly for educational purposes and doesn’t include other potential factors, such as pretax contributions to a qualified retirement plan, mortgage or other deductions. Please consult a tax, legal or financial advisor about your own personal situation.