What Is Covered Under FSA? Complete Eligible Expenses List

Flexible Spending Accounts (FSAs) are among the most powerful tax-saving tools available to working professionals. By contributing pre-tax dollars directly from your paycheck, you effectively discount your out-of-pocket medical expenses by your marginal tax rate. If you contribute $3,000 to an FSA and sit in a combined 24% federal and 6% state tax bracket, you save $900 in taxes.

However, the notorious "use-it-or-lose-it" rule makes many people hesitant to fully fund their accounts. To avoid forfeiting your hard-earned money at the end of the plan year, you must understand exactly what is covered under fsa plans.

This guide breaks down IRS Section 213(d) guidelines, details surprising eligible items, clarifies what requires a Letter of Medical Necessity (LOMN), and provides a strategic roadmap to ensure you never lose a dime of your FSA balance.

The Core Rule: What Defines an FSA-Eligible Expense?

The Internal Revenue Service (IRS) governs FSA eligibility under Code Section 213(d). According to the IRS, eligible expenses must diagnose, cure, mitigate, treat, or prevent a specific disease or medical condition. They must be primarily for medical care, rather than for general health, cosmetic, or hygiene purposes.

While this definition sounds straightforward, the practical application can be confusing. For example, a toothbrush is generally ineligible because it is for general hygiene. However, a specialized orthodontic toothbrush needed to clean around braces may qualify if recommended by a dentist.

To simplify your planning, let's divide FSA-eligible expenses into clear, digestible categories.

Everyday Over-the-Counter (OTC) Essentials

Thanks to the CARES Act of 2020, you no longer need a doctor's prescription to purchase over-the-counter medications with your FSA card. This change permanently expanded the list of everyday health products you can buy tax-free.

Commonly covered OTC items include:

Pain Relievers and Anti-inflammatories: Ibuprofen (Advil, Motrin), acetaminophen (Tylenol), naproxen sodium (Aleve), and aspirin.
Cold, Cough, and Allergy Relief: Antihistamines (Claritin, Zyrtec, Allegra), decongestants, cough drops, nasal sprays, and saline rinses.
Digestive Health: Antacids (Tums), acid reducers (Prilosec, Pepcid), laxatives, and anti-diarrheal medications.
First Aid Essentials: Bandages, gauze, medical tape, antiseptic wipes, burn creams, and first-aid kits.
Menstrual Care Products: Tampons, pads, liners, period underwear, and menstrual cups are fully FSA-eligible.
Skin and Wound Care: Acne treatments (containing active ingredients like salicylic acid or benzoyl peroxide), eczema creams, and medicated ointments.

Vision and Dental Care Expenses

Vision and dental care are two areas where out-of-pocket costs accumulate rapidly. Fortunately, almost all diagnostic and corrective treatments in these fields are covered.

Vision Care

If you wear corrective lenses, your FSA is highly valuable. Eligible vision expenses include:

Prescription eyeglasses, reading glasses, and prescription sunglasses.
Contact lenses, contact lens fitting fees, saline solution, and cleaning cases.
Laser eye surgery (LASIK, PRK, or LASEK).
Eye examinations.
Prescription safety goggles for work or sports.

Dental Care

While cosmetic dental treatments are strictly excluded, preventative and corrective treatments are covered:

Dental cleanings, X-rays, fillings, extractions, and root canals.
Orthodontia, including braces, retainers, and clear aligners (like Invisalign).
Nightguards to prevent teeth grinding (bruxism).
Dentures, denture adhesives, and cleaning solutions.

Note: Teeth whitening products, bleaching kits, and cosmetic veneers are not eligible.

Family Planning and Pediatric Care

Growing and caring for a family involves significant medical expenses. Your FSA can cover a wide range of products and services from preconception through childhood.

Fertility and Pregnancy: Ovulation predictors, pregnancy test kits, fertility treatments (such as IVF, artificial insemination, and embryo storage fees), and prenatal vitamins.
Breastfeeding Support: Breast pumps (both manual and electric), breast milk storage bags, nursing pads, and lactation consultant services.
Baby Care: Baby movement monitors (designed to track vitals), nasal aspirators (like the NoseFrida), baby thermometers, and prescription baby formula (to treat a specific medical condition like a severe milk allergy).
Contraception: Condoms, birth control pills, emergency contraception (Plan B), and vasectomies.

Surprising Items Covered Under FSA

Many consumers miss out on savings because they assume certain modern wellness devices or specialty products are ineligible. Here are some of the most surprising items you can buy with your FSA card without a prescription:

Sunscreen and Lip Balm: Any sunscreen or lip balm with an SPF of 15 or higher is fully eligible, provided its primary purpose is sun protection.
Acupuncture and Chiropractic Care: Alternative medicine treatments are covered if they treat a specific physical ailment.
High-Tech Health Monitors: Blood pressure monitors, pulse oximeters, smart thermometers, and even specialized wearable devices that track specific medical metrics (like continuous glucose monitors) are covered.
Travel Expenses for Medical Care: The cost of traveling to receive medical care is eligible. This includes mileage (calculated at the IRS medical mileage rate), parking fees, tolls, and public transit fares.
Sleep Aids and Snoring Devices: CPAP machines, CPAP supplies, nasal strips (Breathe Right), and anti-snoring mouthpieces.

Items Requiring a Letter of Medical Necessity (LOMN)

Some products and services straddle the line between general wellness and medical treatment. For these items, the IRS requires a Letter of Medical Necessity (LOMN) from a licensed healthcare provider.

An LOMN must clearly state the specific medical condition you have, the treatment recommended, and the duration of the treatment.

Expense Category	Generally Ineligible	Eligible with an LOMN	Examples of Qualifying Diagnoses
Fitness & Exercise	Gym memberships, personal trainers, home gym equipment	Covered if prescribed to treat a specific condition	Obesity, severe hypertension, chronic back pain
Vitamins & Supplements	Daily multivitamins, protein powders, herbal supplements	Covered if prescribed to treat a diagnosed deficiency	Iron supplements for anemia, Vitamin D for severe deficiency
Weight Loss Programs	Weight Watchers, meal delivery services, diet foods	Program fees are covered; food costs are generally still excluded	Clinically diagnosed obesity, type 2 diabetes
Therapeutic Services	Massage therapy, spa visits, hot tubs	Covered if prescribed for physical rehabilitation or pain management	Chronic fibromyalgia, severe sciatica, post-surgical recovery
Air Quality	Humidifiers, air purifiers, dehumidifiers	Covered if medically necessary to manage a severe respiratory condition	Severe asthma, chronic mold allergies, COPD

What Is NOT Covered Under FSA?

To avoid claim denials or tax penalties, you must also know what is strictly excluded. As a rule of thumb, anything that is purely cosmetic, designed for general hygiene, or considered a luxury/convenience item is not covered.

Cosmetic Procedures: Botox (for wrinkles), facelifts, hair transplants, and cosmetic teeth whitening.
General Hygiene and Toiletries: Standard toothpastes, toothbrushes, floss, mouthwash, body wash, shampoos, and deodorants.
Health Insurance Premiums: You cannot use FSA funds to pay your monthly health insurance premiums.
Illegal Treatments: Any drug or treatment that is illegal under federal law (such as medical marijuana, even if legal under state law).
Warranties and Protection Plans: If you buy prescription glasses and purchase an optional scratch-protection warranty, the cost of the warranty is not eligible.

How to Maximize Your FSA and Avoid Losing Funds

Because FSAs operate on a "use-it-or-lose-it" timeline, strategic planning is essential. Keep these practical tips in mind to get the most out of your account:

1. Know Your Plan's Specific Rules

While federal guidelines dictate what can be covered, employers choose how the plan handles leftover funds. Your employer can offer one of two relief options (but not both):

The Carryover Option: You can carry over a set amount of unused funds into the next plan year. For 2024, the maximum carryover limit is $640. For 2025, it increases to $660.
The Grace Period Option: Your employer can give you up to an extra 2.5 months after the end of the plan year to spend your remaining funds.

Check with your HR department to see which option your plan utilizes, or if it uses neither (meaning all unused funds are forfeited on day one of the new plan year).

2. Leverage the Uniform Coverage Rule

One unique advantage of a Healthcare FSA is the Uniform Coverage Rule. This rule states that your full annual election amount is available to you on the very first day of the plan year. For example, if you elect to contribute $3,000 for the year, you can spend all $3,000 in January, even though only a fraction of that amount has been deducted from your paychecks. If you leave your job mid-year after spending the full amount, your employer cannot demand that you pay back the difference.

3. Keep Detailed Receipts and EOBs

Always keep your itemized receipts and Explanation of Benefits (EOBs). Even if you use an FSA debit card, the plan administrator is legally required to verify that the transactions were for eligible expenses. An itemized receipt must show:

The name of the service provider or merchant.
The date of the service or purchase.
A description of the service or item.
The final cost of the item or service.

Credit card signature receipts are usually insufficient because they do not list the specific items purchased.

4. Perform an End-of-Year Audit

In October or November, review your FSA balance. If you have excess funds and no carryover option, schedule diagnostic appointments, dental cleanings, or eye exams. You can also visit dedicated online marketplaces like the FSA Store to stock up on eligible OTC items, high-SPF sunscreens, first-aid supplies, and diagnostic devices before the clock runs out.