Does FSA Cover Glasses Frames and Other Vision Expenses?

Flexible Spending Accounts (FSAs) serve as a benefit for managing various healthcare costs. This article clarifies how FSAs can be utilized specifically for vision care, including whether items like glasses frames are covered.

Understanding Your Flexible Spending Account

A Flexible Spending Account (FSA) is an employer-sponsored benefit that allows employees to set aside pre-tax money for eligible healthcare expenses. Contributions are made through payroll deductions, reducing your taxable income and potentially leading to tax savings.

Funds are available from the first day of the plan year, providing immediate access to the full elected amount for eligible expenses. FSAs are subject to Internal Revenue Service (IRS) rules, including the “use it or lose it” rule, which dictates that funds must be used by a certain deadline.

Eligible Vision Expenses

Flexible Spending Account funds can be used for glasses frames, provided they are part of prescription eyewear. Any eyewear product designed to correct vision is eligible for FSA use. This includes prescription eyeglasses, which correct vision problems like nearsightedness, farsightedness, or astigmatism.

FSAs cover a range of other vision-related expenses. Eligible items include prescription lenses, contact lenses, and contact lens solutions. Eye exams, for routine vision checks and for diagnosing medical conditions, are also eligible expenses. Prescription sunglasses, which offer vision correction and UV protection, are also covered.

Reading glasses, whether prescribed by an optometrist or purchased over-the-counter, are eligible because they aid in vision correction. However, items not considered medically necessary are excluded. This means non-prescription sunglasses, cosmetic contact lenses (unless prescribed for a medical reason), and extended warranties for glasses are not covered by FSA funds. Expenses must be for the diagnosis, cure, mitigation, treatment, or prevention of a medical condition, as outlined by IRS guidelines.

Using Your FSA for Purchases

There are two primary methods for utilizing your FSA to cover eligible vision expenses: direct payment with an FSA debit card or seeking reimbursement after paying out-of-pocket. Many FSA plans issue a debit card linked directly to your FSA balance. This card allows for immediate payment at the point of sale for eligible medical, dental, and vision expenses. When using the card, select “credit” even though it’s a debit transaction, and funds are automatically deducted from your account.

In some instances, you may need to pay for the eligible expense out-of-pocket and then submit a claim for reimbursement. The reimbursement process requires specific documentation to substantiate the purchase as an eligible expense. This includes an itemized receipt or an Explanation of Benefits (EOB) from your insurance carrier. The documentation must clearly show:

• The date of service
• The type of service or item purchased
• The provider’s name
• The patient’s name
• The amount charged

For certain items, such as prescription eyewear, a doctor’s prescription or a Letter of Medical Necessity (LMN) may also be required to prove medical necessity. Retain copies of all documentation for your records in case of an audit.

Key FSA Rules and Deadlines

Flexible Spending Accounts operate on an annual plan year, and an important rule is the “use it or lose it” provision. This rule stipulates that funds must be used by the end of the plan year, or any remaining balance may be forfeited back to your employer. This emphasizes the importance of careful planning when estimating your annual FSA contribution.

Employers have options to provide some flexibility to this rule. One common exception is a grace period, which allows an extension of up to two and a half months into the next plan year to incur and use remaining funds. For example, for a plan year ending on December 31, a grace period might extend the spending deadline until March 15 of the following year. Another option employers may offer is a rollover provision, allowing a limited amount of unused funds to carry over into the subsequent plan year. For example, for 2025, up to $660 in unused funds may be rolled over.

Employers can choose to offer either a grace period or a rollover, but not both. Some employers may opt to offer neither, strictly adhering to the “use it or lose it” rule without extensions. Individuals should consult their employer’s plan details to understand which rules and deadlines apply to their FSA and to plan their healthcare spending accordingly.