What Can I Use My FSA Funds On?

If you've recently opened a Flexible Spending Account (FSA) or you've had one for a while but haven't fully explored its benefits, you might be wondering what expenses qualify for FSA reimbursement. Below is a guide to help you understand what you can use your FSA funds on, along with resources to confirm whether a specific item or service is eligible.

1. Qualified Medical Expenses

FSAs can typically cover qualified medical expenses as defined by the IRS. Common examples include:

• Doctor Visits & Hospital Services:

  • Primary care, specialist visits, surgeries, hospital stays.

• Prescription Drugs & Certain Over-the-Counter (OTC) Items:

  • Pain relievers, allergy medicines, cold/flu remedies, and other specific OTC products (some may require a prescription or Letter of Medical Necessity).

• Dental & Vision Care:

  • Check-ups, treatments, procedures, eyeglasses, and contact lenses.

• Medical Equipment & Supplies:

  • Crutches, wheelchairs, hearing aids, diabetic supplies, etc.

• Therapy & Mental Health Services:

  • Physical therapy, counseling, or psychotherapy, as allowed by IRS rules.

For more detailed information on eligible FSA expenses, refer to IRS Publication 502 (Medical and Dental Expenses) and IRS Publication 969 (Health Savings Accounts and Other Tax-Favored Health Plans—includes information relevant to FSAs).

2. Shopping with Burst's Partner Merchants

Determining which items or services are FSA-eligible can sometimes be tricky, especially since guidelines vary between FSA providers. Shopping with Burst's partner merchants helps simplify this process by:

• Automated Eligibility Processing: Our partners handle FSA eligibility requirements automatically, ensuring compliance with your provider's rules.

• Clear Product Guidance: Our partners clearly indicate which items are FSA-eligible, making it easier to see which purchases may qualify under FSA guidelines.

• Automated LMN Handling: If an item requires a letter of medical necessity (LMN) to be eligible, many of our partners handle this documentation automatically.

• Streamlined Experience: No need to comb through detailed IRS documents when you're casually browsing; our partners provide a seamless shopping experience.

3. Expenses That Typically Do Not Qualify

While FSAs cover a range of healthcare expenses, certain costs don't qualify:

• Cosmetic Procedures: Teeth whitening, plastic surgery for purely aesthetic reasons.

• General Wellness Products: Vitamins or supplements for general health, gym memberships, and personal hygiene products unless prescribed for a specific medical condition.

• Non-Medical Expenses: Using FSA funds for non-health-related purchases can lead to ineligibility and may result in tax penalties.

Always cross-reference questionable items with official IRS guidelines or shop with Burst's partner merchants to ensure compliance.

4. Tax Advantages & Important Rules

• Tax-Free Spending: FSA contributions are made pre-tax, and qualified expenses are effectively paid tax-free.

• “Use It or Lose It”: Unspent funds generally expire at the end of the plan year. Some employers offer a grace period or allow a small rollover amount. Check your specific plan rules.

5. Checking Eligibility

Here are a few ways to confirm whether a specific expense is eligible:

1. Consult IRS Publications: Review IRS Publication 502 and IRS Publication 969.

2. Shop with Burst Partners: Shopping with Burst's partner merchants provides clear eligibility guidance for FSA-eligible items (including LMN requirements) while you browse.

3. Ask Your FSA Administrator: If you're still unsure, contact your plan's customer service or consult a tax professional.

In Summary

An FSA can be a valuable way to manage medical, dental, and vision expenses using pre-tax dollars—potentially saving you money while covering essential healthcare costs. By reviewing the official IRS guidelines, shopping with Burst's partner merchants for instant eligibility guidance (including LMN requirements), and understanding your plan's specific rules, you'll be well-equipped to make the most of your FSA funds.

If you have additional questions or unique circumstances, don't hesitate to speak with a tax advisor, your plan administrator, or a healthcare benefits specialist for personalized guidance. Feel free to reach out to the Burst Team too – we'd be happy to help.