Can I Buy Glasses With My Flexible Spending Account?
Learn how to effectively apply your Flexible Spending Account to cover various vision health needs and maximize your pre-tax savings.
A Flexible Spending Account (FSA) is an employer-sponsored benefit allowing individuals to set aside pre-tax money from their paycheck for qualified healthcare expenses. This reduces taxable income, leading to potential tax savings. The primary purpose of an FSA is to help manage out-of-pocket medical costs for the account holder, their spouse, and dependents. These funds are designated for eligible health-related expenditures not typically covered by health insurance.
Eligible Eyewear and Vision Products
Flexible Spending Accounts can be used to purchase a variety of eyewear and vision products, provided they are medically necessary and prescribed. This includes prescription eyeglasses, a common eligible expense. Prescription sunglasses, used for corrective vision and UV protection, also qualify.
Contact lenses and related supplies, such as cleaning solutions, are typically covered. While most over-the-counter items usually require a prescription, reading glasses generally qualify without one if they address a medical need.
Non-prescription items like cosmetic contact lenses or fashion sunglasses, which do not serve a medical or corrective purpose, are not eligible for FSA reimbursement. The IRS defines qualified medical expenses as amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for affecting any structure or function of the body.
Using Your FSA for Purchases
Two primary methods exist for utilizing FSA funds for eligible eyewear and vision purchases. Many FSA plans provide a dedicated debit card, usable directly at the point of sale. This method offers immediate access to funds and simplifies the payment process for eligible expenses. Retain itemized receipts for all debit card transactions.
Alternatively, pay for eligible expenses out-of-pocket and submit a claim for reimbursement. This involves a claim form and detailed documentation, such as an itemized receipt and prescription copy. Documentation serves as proof of medical necessity and ensures compliance with IRS regulations. The IRS may request these documents to verify eligibility.
Beyond Glasses: Other Vision Expenses
Beyond prescription eyewear, Flexible Spending Accounts cover a broader range of vision services and products. Routine eye examinations, essential for maintaining eye health and updating prescriptions, are eligible expenses. Contact lens solutions and certain eye drops used for medical conditions also qualify for reimbursement.
More significant vision procedures, like LASIK surgery, are eligible medical expenses under an FSA. These procedures are approved because they address a medical condition or improve a bodily function.
FSA Fund Management
Managing Flexible Spending Account funds requires attention to specific rules, particularly the “use-it-or-lose-it” provision. This rule mandates that any unused funds remaining in an FSA at the end of the plan year are forfeited. Employers often offer provisions to mitigate this, such as a grace period.
A grace period allows an additional 2.5 months into the new plan year to incur and claim eligible expenses from the prior year’s funds. Another option is a carryover provision, which permits a limited amount of unused funds, such as up to $660, to roll over into the next plan year. Not all employers offer these options, so review your specific plan details to understand the rules governing your FSA funds.