Allowable Expenses for a Flexible Spending Account

A flexible spending account (FSA) is designed to help families and individuals deal with the high cost of health care and related expenses. Workers can open a flexible spending account through their employer and fund it through payroll deductions. The money that builds up in the account can be used for a number of expenses, including copayments for doctors' visits, prescription drug costs and expenses for dental and vision care.

Drug Costs

• You can use the money in your flexible spending account to pay for any prescription drugs not covered by your health insurance policy. You can also use the money to pay for other items in the drug store, including bandages and similar health care needs. Watch for signs saying "FSA eligible" as you shop at your pharmacy. Many pharmacies post signs throughout the store indicating which products can be purchased with FSA funds, particularly near the end of the year since the funds in the FSA must be used by this time or are forfeited.

Dental Services

• You can pay for dental care with your FSA funds. If you anticipate a large dental expense in the upcoming year for braces or similar dental work, you might want to open an FSA and use pre-tax dollars to fund those expenses. This can save you money in the long run since contributing to an FSA can reduce your taxes and help you budget more effectively. Since the money comes straight out of your paycheck, you do not have to worry about setting the money aside. You can simply allow it to build up until you have the cash available to pay for those major dental bills.

Vision Care

• You can use the money in your flexible spending account to pay for expenses related to eye care. These allowable expenses include the cost of prescription eyeglasses and sunglasses, as well as the money you spend on contact lenses. You can also use the money in your flexible spending account to cover the cost of your vision exam if it is not covered by your health care or vision plan, or the cost of your copayment if the rest of the visit is covered by your insurance.

Dependents

• You can use the money in your FSA to reimburse the costs of health care services for yourself, your spouse and your dependent children. These expenses can include any allowable medical expenses, including doctors' visits, medication expenses and the cost of vision and dental care, including braces and corrective dental work.