Items covered by your flexible spending account you may not know about

Chiropractor adjusting a patientUse it or lose it -- that's the mantra of flexible spending accounts (FSAs). It sounds scary, but these accounts, funded by your pre-tax wages, are great ways to save on child care or medical expenses. So whether you're trying to use all the money you set aside this year or are planning for 2011, you can stretch your income to cover lots of things that would otherwise nibble away at your wallet.

But change is coming to medical FSAs on Jan.1, so touch base with your human resources department or the person handling FSAs when deciding how much to set aside for 2011. One big change is medication -- over-the-counter drugs will no longer be reimbursable. You'll need a prescription for things like Tylenol or Claritin in order for the reimbursement request to be honored.

In 2013, medical FSAs will be capped at $2,500, with employers still able to impose even lower limits. Right now, while medical FSAs are not capped, employers tend to limit them to $5,000, according to Josh King, general counsel of Avvo, a free website that rates and profiles doctors and lawyers. Dependent-care FSAs are and will remain limited to $5,000 or lower, depending on the employer.

Despite these limitations, you may be able to get reimbursed on:
  • Treatment plans, whether you need to lose weight, stop smoking, kick the bottle or a drug addiction. The cost of traveling to support groups like Alcoholics Anonymous could also be covered if your doctor says it's necessary.
  • Doctor's visits, from co-pays to prescription medication. And don't forget the cost of transportation to and from the doctor's office, human resources expert Steve Kane told WalletPop in a telephone interview. "People don't think about parking, train fare, mileage, whatever -- that is reimbursable, too."
  • Alternative medicine, as long as it is deemed medically necessary. So appointments with a hypnotist, a chiropractor, an acupuncturist or other practitioners may be allowable.
  • Medical supplies -- we're talking a wide range, including items such as hearing aids, blood sugar test kits, contact lens cleaners, humidifiers and wigs.
  • If you are disabled or are caring for someone who is disabled, retrofitting your home or car to meet those needs is allowable. Acquiring a service animal or buying a wheelchair or walker may also be covered.
  • Surgery, if it is considered medically necessary. That may include LASIK surgery, a mastectomy to treat breast cancer or eye surgery to repair droopy lids that are impeding eyesight.
  • Gym membership, as long as you've got a doctor's note.
  • When it comes to children, a lot can be covered -- everything from pregnancy tests to fertility treatments. And if you have a dependent-care FSA, child care and even day camp are allowable reimbursements.
  • Immunization for a trip overseas, but not the vacation itself, unfortunately. Arguments that the trip is good for your health will fall on deaf ears.
  • Trips to the dentist for regular cleanings, fillings, crowns and other procedures. It can also cover visits to the orthodontist for braces. Just don't try to get reimbursed for a toothbrush or toothpaste.
Just be aware that "funds in one type of plan -- say, dependent-care FSA -- cannot be used for expenses that would be approved under the other type of plan, the medical expense FSA," said King in an e-mail to WalletPop. In other words, if you want to cover the cost of your nanny, open a dependent-care FSA, not a medical one.

Never considered opening an FSA? Reconsider. It can not only save you up to 40 cents in taxes on every dollar, it's a way to invest in yourself, human resources consultant Paula Marks told WalletPop in phone interview. "It's been a difficult 18 months or so in the economy. Now is the time to invest in yourself so you can get the most out of this life-changing moment."

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Laurey Williams

I should really start a flexible spending account for myself! I had no idea it could be for so many things. It sounds like a great investment to me!

May 27 2014 at 1:52 PM Report abuse rate up rate down Reply
Hilary Kimbel

I have been really interested in looking into getting a flexible spending account. What are the requirements in order to start an application? Are there a lot of different types of flexible spending accounts?

April 04 2014 at 4:02 PM Report abuse rate up rate down Reply
Angela Killpack

I've never heard of an FSA before. Is that something set up by your job? Or can you set one up on your own?

March 26 2014 at 10:58 PM Report abuse rate up rate down Reply
John Howard

This is great information to know. My wife and I just set up a flexible spending account and I think it is going to work out really well for us. I think that she is going to be happy with all things we are able to do with it.

March 26 2014 at 6:38 PM Report abuse rate up rate down Reply

Wow, that is cool. I did not know that in the first place that so many things that would be covered. This is really helpful and it is really going to make a difference with my spending. Thank you for sharing all this great information with me. It has been extremely helpful and has opened my eyes to a lot of possibilities.
Jak Manson |

March 05 2014 at 10:53 AM Report abuse rate up rate down Reply
Jason Knighte

That is actually really nice to know. I will have to remember this next time I need a doctors visit. Those can get pretty expensive these days if you don't have insurance, or anyone helping you out.


February 07 2014 at 6:21 PM Report abuse rate up rate down Reply
Sam Esh

I didn't know that these items were covered by that! I am so happy, I've been needing to figure a lot of this out. Wow, I can't believe how much you helped me out already.

January 31 2014 at 4:32 PM Report abuse rate up rate down Reply
Rico Rodriguez

Thanks for sharing this valuable information. I've been looking into something like a FSA. I just haven't been able to make up my mind, but this was very helpful. Thanks!

Rico |

January 23 2014 at 12:42 PM Report abuse rate up rate down Reply
Charlie McPoyle

This was a great read, I had no idea of all of the benefits to having an flexible spending account. I have three children and I spend a lot on their day care. It is great to know that their are ways FSA can help with the cost of my children's daycare.!traffic/c1lx4

January 22 2014 at 7:48 PM Report abuse rate up rate down Reply
Zoe Taylor

Thanks for this information. It was briefly mentioned in a meeting and I finally got the time to look it up. It's a good thing I did. I will be using this!

January 09 2014 at 1:01 PM Report abuse rate up rate down Reply