Are Eyeglasses FSA Eligible?

A Flexible Spending Account (FSA) is an employer-sponsored benefit that allows individuals to set aside pre-tax money from their paycheck to cover eligible healthcare expenses. This arrangement helps participants reduce their taxable income, saving money on medical costs. The funds can be used for a variety of out-of-pocket medical, dental, and vision expenses throughout the plan year.

Eyeglasses and Vision Care Eligibility

Prescription eyeglasses and contact lenses are eligible expenses for FSA reimbursement. This includes the cost of frames, lenses, and any coatings or features that are part of the prescription eyewear. Eye examinations, including co-pays and deductibles, are also covered. Prescription sunglasses can be purchased with FSA funds if medically necessary for corrective vision.

To ensure eligibility for corrective eyewear, a prescription from an optometrist or ophthalmologist is required. Items that are primarily cosmetic or for general health benefits, such as non-prescription reading glasses, decorative contact lenses, or eye care insurance premiums, are not eligible for FSA reimbursement. The Internal Revenue Service (IRS) provides detailed guidance on eligible medical expenses in Publication 502.

How to Use Your FSA Funds

Using FSA funds for vision care purchases occurs through two methods: direct payment with an FSA debit card or submitting claims for reimbursement. Many FSA plans provide a debit card linked to your FSA balance. This card can be used directly at eligible merchants, such as optometrists’ offices or optical shops. Retain itemized receipts for all purchases, even when using a debit card.

If direct payment with the FSA debit card is not feasible, individuals can pay for eligible expenses out-of-pocket and seek reimbursement from their FSA administrator. The reimbursement process involves purchasing the item, obtaining a detailed itemized receipt, and submitting it to the FSA plan. Necessary documentation includes the date of service, provider’s name, description of the service or item, and the amount charged. An Explanation of Benefits (EOB) from an insurance carrier can also serve as acceptable documentation for services processed through insurance.

Key Considerations for FSA Users

FSA funds are subject to a “use-it-or-lose-it” rule, meaning any unspent money at the end of the plan year may be forfeited. Employers can offer exceptions, such as a grace period or a rollover option. A grace period allows an extended time, up to two and a half months, into the new plan year to incur new eligible expenses using the previous year’s funds. Alternatively, some plans permit a portion of unused funds to roll over into the next plan year, with the maximum rollover amount for 2025 being $660. Employers offer either a grace period or a rollover, but not both.

Maintaining thorough records, including itemized receipts and prescriptions, is important for substantiation. These documents are necessary for reimbursement claims and may be requested by the FSA administrator or the IRS in case of an audit. Understanding your employer’s FSA plan rules and deadlines is important, as details regarding grace periods, rollovers, and claim submission processes can vary.