Ideas for Flexible Spending Account (FSA) Eligible Expenses

It’s time again for the lazy people like me to count up their receipts and make sure we’ve spent all our FSA money. Actually, I’m 99% sure that this year we went well over, both due to bad estimates and the unforeseeable.

If you’re looking for a very, very detailed list of what’s eligible for reimbursement and what’s not, check out this big list by a an actual FSA administrator. From a quick review, here’s some unexpected items that count and more:

Unexpected Eligible Items
Acne treatments
Batteries for durable medical equipment
– (must note usage of batteries on receipt)
Lactaid
Lodging of a companion
– (If accompanying a patient for medical treatment)
Sales tax on qualified medical expenses
Take-home pregnancy test
Wigs
- (if hair loss is due to a medical condition)

More Common Eligible Items That You Can Buy Ahead
Allergy medicine
Antacid
Antihistamine
Bandages
Blood pressure monitoring devices
Cold medicines
Condoms
Contact Lenses
Eyeglasses
Flu shots (!)
First aid kits
Nicotine gum or patches
Thermometers

Funny Things That Aren’t Eligible But Are On The List
Cologne
Deodorant
Hair colorants
Ear piercing
Marijuana or other controlled substances in violation of federal law

I’m pretty sure this is very similar to what the person that reviews your receipts actually looks at. Now I know why my Davidoff Cool Water submission was rejected…

Comments

  1. I noticed the other day that Walgreens actually labels items that are eligible for FSA reimbursement on your receipt. They may miss some things so don’t go purely off what they mark on the receipt but it’s a helpful feature.

  2. Thank god I have an HSA and don’t have to worry about blowing money that I miscalculated. Seems like the FSA’s tax savings hurts when you over estimate how much you’ll need and all of a sudden you have to spend more money and second it’s not earning money like the HSA. I guess for those who go to the doctors and are really sick that the HSA doesn’t make sense to them that the FSA does make sense. Since I’m only sick once or twice a year the FSA makes no sense what so ever for me.

  3. “Seems like the FSA?s tax savings hurts when you over estimate how much you?ll need and all of a sudden you have to spend more money and second it?s not earning money like the HSA.”

    I’ll admit that I probably don’t need new glasses every year (I almost always use contacts), but it’s an easy way to kill off the last bit of cash remaining. If my bleeping eyes would stop changing* I’d use the money for Lasik surgery at the end of the year. Either way, the money’s used for something useful to me.

    This coming year I’ll be using both an FSA and HSA with a high-deductible plan. I’ll use the FSA toward my deductible first.

    *who knew 20 years of wearing hard contacts was keeping my eyes from manifesting massive astigmatism? Argh.

  4. http://www.irs.gov/publications/p502/ar02.html#d0e1048

    “Christian Science Practitioner

    You can include in medical expenses fees you pay to Christian Science practitioners for medical care. ”

    Christian Science relies on prayer for healing. I’d be curious to know how it came to be that our tax dollars subsidize that.

  5. Alan Crabtree says:

    This may not be the most ethical thing, but once I bought an expensive heart-rate monitor ($120), then returned it to the store and used the receipt to get my FSA money back at the end of the year. After all, it is my money (not counting the tax savings).

    Now my employer (and I assume many others), lets me roll over the money until March of next year before it expires.

    Alan

  6. Note – there’s nothing stopping you from using receipts you pick up off the ground – or get from relatives/friends. Obviously easiest if they’re cash receipts – and from varying dates so you get resultant mileage for driving there.

  7. Anyone have good references for FSAs? I have no idea what that is or how I can get one…

  8. Anyone willing to share their FSA receipts for 2007???

  9. Dr.Lightning says:

    NOTE TO ALL: I just found out my 2009 FSA has a grace period until Mar 15, 2010. This means I do *NOT* have to “burn” the rest of the FSA funds in Dec 2009. Instead, I have the first 2 1/2 months of 2010 to do so, without “loosing” the money. This will work great, because I’ll also have a new 2010 FSA. Furthermore, the FSA manager always applies expenses to the 2009 account, if any balance remains, before applying to the 2010 account.

    Note that my [wife's] employer offers the FSA and nothing else, so it’s not so much about having a CHOICE of FSA vs HSA.

    Finally, the 14.5 month usage period, including grace period, will help us better estimate usage in the future. Running out of money early is bad. Having left-over money at the end of the account is bad. Having the grace period, we can intentionally estimate HIGH on our med expenses. For example, assume we estimate an even $1200 for the year, or $100/month. Well, because of the grace period we might fund $1325. Now comes December. If our $100/month estimate was perfect, we’ve used $1200 and have $125 left. We can spend that during January and a quarter of February in the next year. We did NOT “lose” the extra funds. In fact, if expenses were 8% lower, at about $92/month instead of $100/month, after 12 months we’ve spent $1104 and have $221 of our $1325 left. Well, we can spend that money in Jan through Mar 15, which is 2.5 months, which is $230. In other words, we were only $9 short. On the other hand, if expenses were 10% higher, at $110/month instead of $100/month, after 12 months we’ve spent $1320 and only have $5 left. We spend that $5 at the first occurrence in January. Also, since the new account ALSO started up in January, it will cover whatever cost we had above $5. And finally, depending on how much of the grace period we use, we adjust future estimates of FSA needs. (True, we must estimate in Nov and don’t hit the grace period until the following Jan. Nevertheless, we can at least see how it’s going up until Nov. If “this year” account didn’t start paying until Mar 16, we know that “last year” estimate was too high. We lower “next year” estimate not only according to that calculation, but ALSO realizing that “this year” didn’t start until Mar 15.)

    Obviously, the above example includes some rigorous calculations for some estimates that can never be made accurately. Nevertheless, the above example should get the general idea across.

  10. Dr. Lightning, I’d be careful about that. FSA’s are regulated by the IRS and operate on a calendar year basis. While you have until the end of March to FILE your reimbursements, the date of service (for medical treatment) or the date on the receipt must be dated during the FSA calendar year. For example, it is now 2010. I have until the end of March to file a claim, but the date of the service of the claim must be during 2009.

    I could be wrong here, but I have been in benefits for many years and am fairly certain there is no wiggle room here. That’s just because these are regulated by the government and are ‘one size fits all’. This is mainly due to the tax implications. This is the same reason the government says what actually qualifies. You won’t find something that qualifies on one FSA but doesn’t on another.

    I’m at least 99% on this so you’ll want to talk to your HR or benefits person where you work to make sure you don’t end up with a bunch of unspent money… if you haven’t already. Lots of luck to you!

  11. Rob,

    Dr. Lightning is likely referring to the recent IRS change which allows employers to extend the FSA plan year by a “grace period” of up to 2 1/2 months. Employers are not required to allow this grace period, but this year they are allowed to do so if they wish.

    From irs.gov:

    Balance in an FSA

    Flexible spending accounts are “use-it-or-lose-it” plans. This means that amounts in the account at the end of the plan year cannot be carried over to the next year. However, the plan can provide for a grace period of up to 2½ months after the end of the plan year. If there is a grace period, any qualified medical expenses incurred in that period can be paid from any amounts left in the account at the end of the previous year. Your employer is not permitted to refund any part of the balance to you.

  12. I had a claim for reimbursement in 2009 declined because I retired on 1/31/2009 and the insurance company states I was not covered for the time the claims were filed. The claims were prescriptions that are covered under my wife’s insurance plan, which is a different carrier. I assumed i could use the FSA deducted in January for any claims in 2009. Am I wrong.? Thanks.

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  1. [...] For anyone who is working and has the option to have a Flexible Spending Account, MyMoneyblog just made a post with a link to all of the eligible expenses: Link [...]

  2. [...] For anyone who is working and has the option to have a Flexible Spending Account, MyMoneyblog just made a post with a link to all of the eligible expenses: Link [...]

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