A health care flexible spending account (FSA) lets you set aside pre-tax payroll dollars for qualified medical costs. “Qualified” is narrower than “health-related.” Copays, many prescriptions, and prescribed glasses often clear. Gym memberships, most cosmetics, and household vitamins usually do not. This guide is a consumer map—not your plan’s SPD. Confirm every category with your administrator (WageWorks/HealthEquity, Fidelity, your insurer’s FSA desk, etc.).
Rules and use-it-or-lose-it: Flexible spending account rules. HSA vs FSA: HSA and FSA basics. Runway after plan year-end: FSA grace period.
Usually eligible (health FSA)
| Category | Typical examples | Keep |
|---|---|---|
| Plan cost-sharing | Copays, coinsurance, deductibles toward care | EOB + receipt |
| Prescriptions | Rx drugs, insulin; some OTC now eligible with rules | Rx label / Rx number |
| Vision | Eyeglasses, contacts, prescribed solution; eye exams | Itemized receipt |
| Dental | Cleanings, fillings, crowns, orthodontics (plan-dependent) | Treatment invoice |
| Equipment | Crutches, blood-pressure monitors, many durable items | Rx if required |
| Mental health | Therapy copays when medically necessary | Receipt + provider info |
Cash-pay vision and dental without using FSA dollars: Paying for glasses and dental out of pocket. How deductibles interact with insurance: Health insurance deductibles.
Commonly denied or restricted
- Cosmetic dentistry or elective appearance procedures without medical necessity.
- General wellness: most gym dues, massage without a letter of medical necessity.
- Cosmetic contacts (plano fashion lenses).
- Premiums for health insurance (health FSA generally does not reimburse premiums).
- Dependent care (daycare) — that is a dependent care FSA, a different account (DCFSA).
- HSA double-dip while covered by a general-purpose health FSA (limited-purpose FSAs pair differently—see plan rules).
Documentation that survives audit
- Merchant receipt with date, amount, description.
- Explanation of benefits (EOB) when insurance was billed.
- Prescription or letter of medical necessity when the administrator requires it (orthotics, some OTC).
- For recurring orthodontia, the contract schedule your FSA vendor accepts.
Debit-card swipes can still be substantiated later. Save PDFs the week you spend.
Worked example: $2,400 election
Sam elects $2,400 for the plan year (illustrative; IRS caps change—confirm current limit).
| Planned spend | Amount | FSA-eligible? |
|---|---|---|
| Remaining deductible / copays | $1,100 | Usually yes |
| New glasses + exam | $350 | Usually yes |
| Dental crown patient share | $600 | Usually yes |
| Gym membership | $400 | Usually no |
| Prenatal vitamins (OTC) | $80 | Often needs Rx / may deny |
Sam drops the gym from the FSA plan, funds $2,050, and pays the gym from post-tax checking. That avoids forfeiture if the crown is delayed. If Sam expects a late-year bill, Sam checks whether the plan offers a grace period or carryover (FSA grace period).
Open-enrollment habits
- Total last year’s copays, dental, and vision from EOBs—not guesses.
- Subtract anything a spouse’s HSA or other coverage will already fund.
- Leave a cushion only if your plan’s forfeiture risk is low (carryover/grace).
- Dependent care dollars belong in a DCFSA election, not the health FSA line.
Checklist
- Read your plan’s eligible-expense list and card rules.
- Separate health FSA from dependent care FSA.
- Elect from documented history, not aspirational wellness spend.
- Save receipt + EOB for every swipe.
- Calendar grace/carryover deadlines in writing.
- Confirm OTC and dual-purpose items before you rely on them.
Educational only. Not tax, legal, or benefits advice. IRS Publication 502 categories and your employer’s plan document control; limits and eligible lists change.