The perks of being an employer—at year’s end, you can guide your team on how to fill their carts with all kinds of useful FSA-eligible expenses. Why’s that? Because many employees have a surplus of FSA money they could be on the verge of losing when the plan year ends.
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FSAs, or Flexible Spending Accounts, are employer-sponsored accounts that allow your team to contribute pre-tax dollars (up to $2,750 in 2021) for health care expenses.
While Health Spending Account (HSA) funds usually roll over every year, FSA funds are a use-it-or-lose-it kind of benefit, and usually expire on December 31st of each year. Some company plans do allow employees to roll over $500 to the following year, or to defer the spending deadline to March 15 of the following year.
However, policies vary. Therefore, it’s good to be familiar with the details of your specific plan so you can help your employees get the most out of their FSA money.
So how can your team avoid losing their FSA money? Easy. They just have to spend it before the new plan year begins (usually January 1).
While most FSA-eligible items require prescriptions, there are also a lot that don’t. Here are twenty surprising and creative ways that employees can spend their health FSA money:
20 surprising FSA-eligible items
1. New specs and other eyewear stuff
Employees can upgrade their prescription and refresh their look with their handy stash of health FSA funds. From fashionable frames to sunglasses, most prescription eyewear is reimbursable up to a certain amount. Reading glasses count too and no prescription is needed for these! Annual eye exams, eyeglass care, and eye drops can be covered, too.
Contact lens wearers can stock up on lenses, solution, and cases for the new year, all compliments of their health FSA. If any employee is ready to ditch glasses or contacts altogether, the LASIK procedure for vision correction is another creative option to spend FSA funding.
2. Feminine hygiene products
Thanks to the CARES act, feminine hygiene products such as pads, tampons, liners, and menstrual cups are now eligible expenses. This means health FSA dollars can also be used to buy both disposable and non-disposable period panties. Menstrual relief medications, heating patches, menstrual cup wash, UTI tablets, itch creams, suppositories and many other feminine hygiene products are also covered!
3. Fitness classes and devices
Participants can spend health FSA money on some surprising health-related products and services, including items related to physical fitness. In many cases, they can use it to purchase select fitness device trackers , workout machines, fitness programs, and even health club memberships if they qualify.
IMPORTANT: some of these purchases might require a special health condition or a doctor’s Letter of Medical Necessity (LMN) in order to be eligible so it’s important to check out the FSA store to see which items qualify.
4. Goodies for parents
From thermometers to sunscreen, there’s a long list of practical health FSA-eligible family items that can increase savings across the family household. By using health FSA money on nursery items like diaper rash ointment, baby breathing monitors, infant thermometers, and breast pump supplies, parents can stock up on these heavily used items and cut down costs.
For toddlers and older kids, health FSA dollars can be spent on bedwetting aids, kids’ sunscreen, kids’ bandages , and more.
Parents-to-be are also in luck. Breastfeeding classes and even cord blood banking may be partially or fully reimbursable through their health FSA plan.
Even those thinking of becoming parents can enjoy some coverage perks, like pregnancy tests, fertility kits, and other family-planning supplies. More on this is listed in some of the categories below.
5. Emergency kits
First aid kits, aspirin, bandages, allergy medicine, ongoing prescriptions, and dust masks are a few of the emergency essentials covered under health FSAs. Antibacterial ointments and wound care for surprise cuts and scrapes such as Neosporin or Bacitracin are eligible expenses. Certain over-the-counter medications such as pain relievers may also be eligible. The FSA store tells you which over-the-counter medications qualify.
6. Contraceptives and family planning products
Whether an individual is looking for emergency contraceptives such as the morning-after pill or family planning products such as prenatal vitamins, they are covered! Condoms are considered health FSA eligible expenses. Products such as pregnancy tests, fertility treatments, breastfeeding supplies, ovulation tests, and sperm test kits are also covered. Health FSA funds can be used for birth control with a prescription from a provider.
7. Mental wellness and health services
Many mental health treatments and services (including some forms of telehealth and online therapy) are covered by health FSAs. This includes psychiatric therapy and specialized treatment programs such as resident treatment programs at addiction treatment facilities or outpatient therapy sessions. Prescriptions for mental health conditions may also be covered with a valid prescription from a licensed physician or therapist. The FSA store has more information about FSA eligibility for mental health services.
8. Hand sanitizer, face masks and other personal protective equipment (PPE) for COVID-19
Under the CARES act, the IRS has stated that PPE used for “the primary purpose of preventing the spread of COVID-19” can be treated as medical expenses and considered FSA eligible. This includes face masks, hand sanitizers, sanitizing wipes, tissues, and gloves. Given that these items are non-perishable and can be stored for long periods of time, it’s a great way to spend that extra FSA money.
FSA providers may also retroactively allow any claims for COVID-19 protective gear purchased after January 2020 and through the end of December 2022 to be paid out or reimbursed. However, a health FSA participant can only be reimbursed for spending that occurred during the current plan year unless their employer took advantage of a temporary FSA grace period extension through the Consolidated Appropriations Act of 2021. Employees should check for any receipts and see if they are able to get retroactively reimbursed for COVID-19 protective gear purchased during the plan year.
9. Pampering splurges
Your health FSA can also be utilized for self-care and relaxation. For example, foot massagers and shoe insoles can be considered eligible expenses. Acupressure mats, face massagers, and relaxation eye masks are a few other potential eligible expenses.
10. Try acupuncture and other alternative medical treatments
Many studies have shown that acupuncture is useful for treating chronic pain, arthritis, nerve pain and even depression. Health-boosting services like acupuncture, chiropractic support and many alternative medicines also make the list of health FSA-covered items.
Please note that some of these services may require an LMN. If you’ve ever been curious about these treatments, using health FSA funds is a great way to do it!
11. Dental must-dos
Using remaining funds to tackle dental procedures or upkeep is a smart way for employees to get the most bang for their health FSA funds. Sealants, fillings, checkups, X-rays, and even veneers for some conditions are covered under most health FSA plans. Even the cost of braces as well as cleaning fees (including co-pays and deductibles) may be eligible. Health FSA dollars can be used on mouthguards that prevent teeth grinding or on dental cleaning solutions. Employees can also stock up on select dental basics.
12. Prepare for upcoming travel
Employees’ health FSA surplus can be put to good use buying supplies for their upcoming trips such as travel-sized headache medicine, carry-on-size first aid kits, motion sickness medications including acupuncture wrist bands to relieve nausea, or sunscreen for tropical getaways. Orthopedic neck pillows and compression socks (just make sure they’re rated 30-40 mmHg or above) are covered for long flights as well. Many other essentials may also be listed in the health FSA store so it’s important to check and stock up!
13. Get a better night’s sleep
Sleep masks, thermal eye masks and even certain over-the-counter sleep aids can be bought using health FSA funds to help with a better night’s sleep. Bed warmers for cold nights, air purifiers, air filters, or vaporizers are also covered, although some of these might require a medical provider to outline how it would be used to help with a medical condition. For those nights where you’re sleeping off a cold or flu, many night time flu medications are health FSA eligible and can help get you in better shape with a good night’s sleep.
14. Time to get on that skin care hype!
Face creams, lip balms, toners, acne treatments and some other skincare products may be eligible expenses. This includes sunscreen! Look for brands like Clean and Clear, Neutrogena and Proactiv or products that contain common ingredients such as salicylic acid, benzoyl peroxide or azelaic acid. While some of these items might require a prescription for reimbursement, many do not. Even if a prescription is required, many health FSA plans don’t require a separate prescription for each item and multiple products or drug categories can be bought for a single prescription. It’s important to check the rules of your health FSA plan and speak with your doctor to optimize your prescription.
15. Try some high tech gizmos and gadgets
For individuals who have large amounts of health FSA funds to use up, they may be able to cover many high tech devices such as light therapy treatments for acne, electrical stimulation devices for chronic pain, smart thermometers and blood pressure cuffs, cloud-connected stethoscopes, vibrating nausea relief bands, vibrating arthritis gloves and more! Browse the FSA store to check out what’s covered.
16. Ancestry kits with health reports
For individuals who’d like to learn about their heritage and the nuances of how their DNA can affect their health, many ancestry kits like 23andme are typically considered a health FSA eligible expense. To be covered, these kits must usually come with a health report.
17. Smoking cessation and addiction treatment
For individuals trying to kick alcohol or smoking habits, health FSA funds can be used toward nicotine gum, lozenges, patches, inhalers, and nasal sprays. Smoking cessation counseling qualifies for reimbursement as does online therapy programs. AA and NA meetings are an eligible expense along with transportation to and from those meetings. Please review the terms of your health FSA and if a letter of medical necessity from a physician is required.
18. Travel, lodging, and other expenses incurred due to a medical condition or treatment
Any lodging or housing expenses incurred due to medical treatments including any meals may be covered. In addition, the cost of attendance for any medical conferences related to an pre existing illness is allowable. However, lodging and meals for these conferences are not covered.
For individuals who might need to modify their home due to medical conditions, these expenses are reimbursable through health FSA dollars. This includes expenses such as installing a ramp, widening doorways, modifying stairways, making a home more accessible, modifying a vehicle to make it more accessible and more. Even mileage to and from medical appointments may also be available for reimbursement given that the eligibility requirements are satisfied. Make sure to review the terms of your health FSA to see what expenses may qualify for reimbursement.
19. Weight-loss programs and procedures
Many weight loss programs are covered as long as they are diagnosed by a physician and a letter of medical necessity is written. This includes weight loss counseling and wellness scans. Unfortunately, weight loss supplements are not eligible for reimbursement. Certain weight loss surgeries are eligible, though.
20. Diabetic and wound care
Diabetic care is expensive and according to a 2020 study, the average person diagnosed with type 1 diabetes spends a little more than $2,400 out of pocket on diabetic supplies. Diabetic monitors, glucose tablets, test kits, strips and insulin supplies such as syringes, needles are covered under eligible health FSA expenses. Blood pressure cuffs, cholesterol medications and hypertensive medications can be reimbursed. Certain diabetic foot care and wound care is also eligible under health FSA dollars. This includes foot braces, foot support, antibiotic ointments and bandages. Many of these supplies are very long lasting with no expiration date which makes for another great reason to stock up!
While not everything is a health FSA-eligible expense, a surprising number of services and supplies are. By checking the FSA store which is constantly updated, hard-earned money can be put to good use. Amazon also has an Amazon FSA store through which individuals can purchase essentials! Happy shopping!
Does your company offer an FSA? Learn more about how to get better employee benefits with Gusto.