You can use a healthcare flexible spending account (FSA) to help pay for prescription medications approved by the Food and Drug Administration (FDA). You can also use it toward prescription eyeglasses and sunglasses and some dental expenses.
A healthcare FSA is a pretax benefit account to which you make monetary contributions over time. You can use the funds to pay for eligible out-of-pocket medical, dental, and vision care expenses not covered by your healthcare plan or elsewhere.
“Pretax” means the money that you contribute from your paycheck goes into your FSA as a deposit before it’s taxed. As a result, these pretax dollars increase your take-home income and lower the amount of your income that is taxed.
The IRS sets guidelines for FSA programs, such as eligibility rules, contribution limits, and qualified expenses. Within those guidelines, individual employers determine which specific expenses are covered by their FSA programs. Some employers may also make contributions to FSAs.
You can use the money in your FSA for various healthcare necessities, such as prescriptions and over-the-counter (OTC) medications.
You can use FSA funds to pay for any type of FDA-approved prescription medication, if you have a valid doctor’s prescription. This includes brand-name and generic prescription drugs. It also includes drugs used for chronic conditions, sudden illness, and preventive treatment. Prescription eyeglasses and sunglasses are also eligible for FSA reimbursement.
All OTC medications are eligible for reimbursement through an FSA account. But OTC products used for general health are not eligible. The following table shows examples of items that are eligible and examples that are not.
| Some OTC products eligible for reimbursement | Some OTC products not eligible for reimbursement |
|---|---|
| • insulin • acne treatments • cold medications • antacids | • toothpaste • mouthwash • moisturizer • cosmetic products |
No, the IRS does not set FSA reimbursement limits for prescriptions.
But it does set an annual FSA contribution limit of up to $3,300 per year. You can use these FSA funds at your discretion. This means the IRS does not limit how much you can use specifically for prescriptions.
As mentioned above, you can use FSA funds toward all OTC medications, including insulin. This includes OTC products that you purchase with the intent to treat a medical condition.
But OTC products that aren’t medications, are used for cosmetic purposes, or are beneficial to your general health aren’t eligible for FSA reimbursement. Examples include:
- teeth-whitening products
- wrinkle-reducing creams
- mouthwash
- shampoo
- lotion
- toothpaste
- vitamins
- dietary supplements
Typically, you cannot use your FSA to pay for fitness expenses, such as a gym membership or exercise class. But you might be able to if your healthcare professional recommends exercise to treat a medical condition. In this case, you’ll likely need a Letter of Medical Necessity for this expense to be FSA eligible.
Certain medical equipment and supplies also may be eligible for FSA reimbursement. Examples include:
- blood sugar testing kits
- insulin syringes or needles
- bandages
- crutches
- breast pumps
Yes, you can. Even if you have health insurance, prescription coverage, or both, you still can use FSA funds toward prescriptions. But the funds can be applied only to out-of-pocket prescription costs you incur.
For example, assume a prescription costs $100 and your prescription insurance covers $75. You’ll have an out-of-pocket expense of $25. You can use your FSA funds toward only the $25 out-of-pocket cost, not the $75 portion.
An FSA account is a savings account that uses pretax dollars to pay for eligible out-of-pocket healthcare costs. Items eligible for FSA reimbursement include various healthcare necessities, such as:
- prescriptions
- OTC medications
- certain medical equipment or supplies
You can use FSA funds to pay for any type of FDA-approved prescription medication, including brand-name and generic prescription drugs. This includes drugs used for chronic conditions, sudden illness, and preventive treatment.
All OTC medications, including insulin, are also eligible for reimbursement through an FSA account. But OTC products used for general health or cosmetic purposes are not eligible for reimbursement.
Disclaimer: Healthline has made every effort to make certain that all information is factually correct, comprehensive, and up to date. However, this article should not be used as a substitute for the knowledge and expertise of a licensed healthcare professional. You should always consult your doctor or another healthcare professional before taking any medication. The drug information contained herein is subject to change and is not intended to cover all possible uses, directions, precautions, warnings, drug interactions, allergic reactions, or adverse effects. The absence of warnings or other information for a given drug does not indicate that the drug or drug combination is safe, effective, or appropriate for all patients or all specific uses.