Can You Use FSA for Contact Lenses?

A Flexible Spending Account (FSA) is an employer-sponsored benefit that allows individuals to pay for eligible out-of-pocket medical expenses with pre-tax dollars. This provides tax savings on healthcare costs. FSAs help manage various healthcare expenditures throughout a plan year. Funds are deducted from an employee’s paycheck and deposited into the account.

Eligible Contact Lens Expenses

Flexible Spending Accounts can be used for a variety of vision-related expenses, including prescription contact lenses. Any prescribed contact lenses for vision correction, such as daily, weekly, monthly, toric, or multifocal lenses, are eligible. Related care products are also covered. This includes contact lens solutions, cases, and rewetting or lubricating eye drops.

Expenses for required eye exams to obtain or update a contact lens prescription are also eligible for FSA reimbursement. To qualify as an eligible expense, items and services must be medically necessary. For instance, colored contact lenses are only eligible if prescribed by a doctor for medical reasons, not solely for cosmetic purposes. Non-prescription eyewear or contact lenses do not qualify for FSA funds.

Using Your FSA for Purchases

There are primary methods for using FSA funds to cover eligible contact lens expenses. Many FSA plans provide a debit card linked directly to the account, which can be used at the point of sale with approved merchants or healthcare providers. This method allows for immediate payment without needing to pay out-of-pocket first. Save itemized receipts for purchases made with an FSA debit card, as your FSA administrator may request them for substantiation.

Alternatively, individuals can pay for eligible expenses using personal funds and then submit a claim for reimbursement from their FSA. The reimbursement process requires a claim form and detailed documentation. Required documentation for substantiation includes an itemized bill or receipt from a third party that specifies the service or product, the date of service or sale, and the amount of the expense. An Explanation of Benefits (EOB) from an insurance company can also serve as supporting documentation.

Key Considerations for FSA Use

A key aspect of FSA management is the “use it or lose it” rule, where unspent funds at the end of the plan year may be forfeited to the employer. Many employers offer options to mitigate this rule. One common option is a grace period, which allows an additional 2.5 months after the plan year ends to incur new eligible expenses and use remaining FSA funds.

Another option employers may provide is a carryover, allowing a portion of unused funds to be rolled over into the next plan year. For example, for plan years ending in 2025, up to $660 may be carried over, though this limit can vary annually. Employers offer either a grace period or a carryover, but not both. It is important to consult with your specific FSA plan administrator to understand the rules that apply, as they can vary.