7 Things You Didn't Know Your FSA Covered

A flexible spending account (FSA), also known as a flexible spending arrangement, is a special account you can use to pay for certain out-of-pocket healthcare costs. Money transfers into your FSA throughout the year through payroll deductions, and you use the funds for allowable expenses.

You may well have some money left over at the end of the year and you could lose it unless you spend it. It makes sense to stock up on health-related items you might need, or even pay for dental work that you’ve been putting off.

You'll be surprised at some of the products and services that are covered.

​How an FSA Works

An FSA is an account that you pay into throughout the year. FSAs are offered by your employer. If you have a health plan through your job, you can use an FSA to pay for copayments, deductibles, some drugs, and certain other healthcare costs.

Using an FSA can reduce your taxes while giving you a handy cash stash for minor expenses that aren't covered by your health insurance.

You pay money into an FSA before it is taxed. In other words, you don’t pay taxes on the money you put into your FSA. This means you’ll save an amount equal to the taxes you would have paid on the money you set aside.

The savings you can make in this way can be substantial. If you earn $50,000 a year and have a tax rate of 30%, TurboTax estimates that putting $2,000 in an FSA account will net you $600 in savings.

You generally must use the money in an FSA within the plan year. But your employer may offer one of two options:

• It can provide a grace period of up to 2½ extra months to use the money in your FSA.
  
• It can allow you to carry over up to $640 per year to use in the following year.
  

Your employer can offer either of these options but not both. Companies are not required to offer either.

At the end of the year or at the end of the grace period, you will lose any unspent money in your FSA. So it's important to plan carefully and not put more money in your FSA than you think you'll spend within a year on things like copayments, coinsurance, drugs, and other allowed healthcare costs.

Most people will have a little money left over in their FSA at the end of the year, and you might be unsure about how you can spend it. Below, we’ve listed some useful items that are covered. If you need a specific medical item for yourself or your family, you should check the complete list on the IRS website or ask your pharmacist or doctor whether what you need is covered.

A word of warning, though: Some of these products require you to have a prescription from your doctor.

How to Spend Your Leftover FSA Dollars

You can browse sites like FSA Store, Health Products for You, Target, or Amazon’s FSA store to shop for everyday items that you may need and that are covered by FSA. The list of things you can buy with FSA funds is very long and contains some unexpected items and services.

Below, we’ve listed some of the items that you might not expect FSA to cover. If you are unsure about a particular item, you should check the list on the IRS website, or ask your pharmacist or doctor.

​Baby and Child Care

Babies and children need a lot of things to keep them safe, happy, and healthy. Thankfully, many baby and child care products are eligible FSA expenses. This includes both everyday items and rarer purchases, such as:

• Sunscreen
• Cold medicines
• Multivitamins
• Toothpaste
• Baby monitors

If you are a parent who has recently given birth, you can get many more items for postpartum care with your FSA money, including postdelivery wraps, a breast pump, and nursing supplies.

​Dental Procedures

You can use your FSA money for many of the costs associated with dental procedures, and this is one of the most valuable things an FSA can offer.

In general, you can use your FSA money to pay copays and out-of-pocket expenses. This covers everything from routine cleaning to procedures like fillings, root canals, braces, extractions, and dentures.

If you are uncertain, check with your dentist about what an FSA will cover before you have these procedures.

You can’t use your FSA money to buy everyday items such as toothbrushes, toothpaste, and dental floss. But there are some dental health products available in the FSA store, such as athletic mouthguards and denture retainer cleaners.

​Eye Care

Just as you can spend FSA money on dental procedures, you can also spend it on eye care. You can use FSA funds to buy contact lenses or eyeglasses, as well as contact lens accessories such as cleaning solutions and cases. Prescription sunglasses are covered.

You may have to pay upfront and then ask for reimbursement, depending on the optician.

​Feminine Hygiene Products

The CARES Act of 2020 added feminine hygiene products to the list of those covered by your FSA. This means that you can now use FSA money to buy pads, tampons, liners, and even menstrual underwear. You can also purchase alternative period products like menstrual cups.

​Pregnancy and Family Planning Products

You can use your FSA money to buy a wide range of family planning products. This includes pregnancy tests, fertility treatments, monitors, prenatal vitamins, and breastfeeding supplies. Even condoms are eligible.

You can also use your FSA money for pregnancy services such as birth classes and medically certified doulas.

The situation with birth control is more complicated. You can use your FSA funds to pay for birth control, but you’ll need to get a prescription first. If you’re unsure what your FSA will cover, ask your pharmacist whether an item is covered.

​Stop Smoking Programs

You can also use your FSA funds for longer-term health goals. If you want to quit smoking, you are not alone: Most adult smokers want to give up smoking, according to a 2020 report by the surgeon general. In 2018, the Centers for Disease Control and Prevention found that 55.1% of adult smokers (21.5 million) said that they had made an attempt to quit in the past year.

You can use your FSA money to pay for prescribed patches and nicotine gum, which can help you quit. However, you’ll need a prescription for a smoking cessation program.

​Sunscreen

It may seem surprising, but your FSA money in fact covers sunscreen.

Any broad-spectrum sunscreen with SPF 15 protection or above is covered, and that includes moisturizers with SPF protection at that level or above. Some sunscreen products keep for as long as three years, so you can stock up all you want.

​The Bottom Line

If your employer offers an FSA program, this can be a great way to save money on your healthcare costs. You should try to estimate how much to put into this account so that you use it up before the end of the year, but most people will have a little left over in December.

Understand the terms of your plan and see if you have extra time to spend the money. If you have to spend the funds before Dec. 31, take a look at the list of products that are covered by FSA—the range might surprise you.