![]() Gym memberships and health insurance premiums are a “no” as well. What happens if I spend my flexible spending account (FSA) incorrectly, on ineligible items?īeware: All healthcare costs are not created equally under FSA tax rules.ĭaily care products, like Vaseline, toothpaste, or deodorants, are not flexible spending account- eligible expenses. Over-the-counter medications (Tylenol, allergy relief, cold medicine) Personal protective equipment (hand sanitizer, masks,sanitizing wipes) Monthly period supplies (cups, tampons, liners, period underwear, and pads) Here are a few more items that you can add to your FSA shopping list: This legislation expanded the list of FSA-eligible medical expenses and removed the prescription requirement for several medicines. Your hard-earned FSA dollars can stretch further thanks to the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was signed into law on March 27, 2020. What are some items that are newly covered by flexible spending accounts (FSAs) in 2021? ![]() However, here are a few other “yes” items that might surprise you: You’re probably aware that you can use FSA dollars to pay deductibles, co-pays at the doctor’s office, and prescription medications. Here’s a list of what the IRS classifies as eligible expenses for flexible spending accounts. Examples of items that have been traditionally covered by flexible spending accounts (FSAs) Check with your employer to determine your plan structure and benefits. For 2021, there’s a cap of $2,750 per employer for health FSAs and you can roll over unused funds to 2022. Since this account comes with built-in tax benefits, limitations do apply. If you’re wondering what counts for FSA coverage, the IRS provides an elaborate list of “qualifying expenses.” To qualify for FSA coverage, the expenses must be medically necessary. For example, an FSA can cover an eye exam, chiropractic visit, or even massage therapy. FSA participants set aside a portion of their paychecks to pay for certain out-of-pocket medical products and services tax-free. This tax-advantaged account allows employees to contribute pre-tax dollars to pay for qualified health expenses. What is a flexible spending account? (FSA)Ī flexible spending account is an employer-sponsored health benefit. Below we list some FSA-covered items that may surprise you, and let you know how to maximize your benefits. New legislation has loosened FSA-eligibility requirements and provided more ways for Americans to boost their FSA purchasing power. According to a 2020 GoodRx survey, nearly one out of every three Americans saw a spike in their out-of-pocket costs for an ongoing health condition.įlexible spending accounts are a great way to keep your costs down while lowering your taxable income. In July, 67 brand drugs increased by an average of 3.5%. This is a win for many Americans who’ve had to deal with drug price increases and rising out-of-pocket costs. ![]() The COVID-19 pandemic paved the way for expanded FSA benefits, such as coverage for pain relief medications and allergy products without a prescription. Flexible spending accounts (FSA) have been in the spotlight lately. ![]()
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