Are Over-the-Counter Hearing Aids FSA Eligible?

The increasing availability of over-the-counter (OTC) hearing aids has presented a new option for individuals seeking to address hearing challenges. Many consumers are now wondering if these devices, which can be purchased without a prescription, are eligible for reimbursement through a Flexible Spending Account (FSA). Understanding how FSAs work and the specific rules surrounding eligible medical expenses can clarify this common question.

What is a Flexible Spending Account (FSA)?

A Flexible Spending Account (FSA) is an employer-sponsored benefit that allows individuals to set aside pre-tax money from their paycheck to pay for eligible healthcare expenses. This arrangement helps reduce taxable income, potentially leading to tax savings. FSAs can be used for a wide range of medical, dental, and vision costs not typically covered by other health plans, including deductibles, copayments, and prescription medications.

One characteristic of an FSA is the “use-it-or-lose-it” rule, meaning any unused funds at the end of the plan year are forfeited. However, employers may offer exceptions, such as a grace period of up to two and a half months into the new plan year, or allow a limited amount to be carried over. For the 2025 plan year, the maximum carryover amount is $660, an increase from $640 in 2024.

Employers can choose to offer either a grace period or a carryover option, but not both. Additionally, while the IRS sets maximum contribution limits for FSAs, which is $3,300 for 2025, employers may impose a lower limit. Employees must elect their contribution amount annually during open enrollment.

Eligibility of Over-the-Counter (OTC) Hearing Aids

Over-the-counter (OTC) hearing aids are considered eligible medical expenses for Flexible Spending Account (FSA) reimbursement. The Internal Revenue Service (IRS) classifies hearing aids as qualified medical expenses, consistent with the broad definition of medical care outlined by the IRS, which includes costs for diagnosis, treatment, or affecting body function.

The Over-the-Counter Hearing Aid Act of 2022 created a regulatory category for these devices. This reinforced their classification as medical devices intended to address hearing impairment, supporting their eligibility for FSA use. Whether purchased with a prescription or over the counter, as long as the device is designed to assist with hearing function, it qualifies.

FSA funds can also cover associated expenses, such as hearing aid batteries, repairs, maintenance supplies like cleaning kits, and custom earmolds. While OTC hearing aids are broadly eligible, individuals should verify with their specific FSA plan administrator, as plans may have unique requirements or limitations.

How to Use Your FSA for OTC Hearing Aids

Many FSA plans provide a dedicated debit card, which can be used directly at the point of sale. This method can simplify the process, as transactions at qualified merchants for eligible products may be automatically approved.

If an FSA debit card is not available or accepted by the merchant, individuals can pay for the OTC hearing aids out-of-pocket and then submit a claim for reimbursement. The claim submission process involves logging into the FSA administrator’s online portal or mobile app. Some administrators also offer options to submit claims via fax or mail.

When submitting a claim, individuals will need to provide details such as the date of purchase, the item description, the amount paid, and the provider or store name. Reimbursement processing times can vary, but online submissions are processed within a few business days. Funds are deposited directly into a linked bank account, though some administrators may issue checks.

Required Documentation for Reimbursement

For OTC hearing aids, an itemized receipt is required. This receipt should clearly display the merchant’s name, the date of purchase, a specific description of the product purchased (e.g., “OTC Hearing Aid” or similar), and the total dollar amount paid.

Maintaining clear records is important for potential audit purposes, as the IRS may request documentation to substantiate claims. While a doctor’s note or prescription is not required for eligible OTC items, some specific FSA plans might have unique requirements. Consult your FSA plan administrator to confirm any additional documentation.