Eligible & Ineligible Expenses

Below is a list of the expenses that are eligible and ineligible for reimbursement through your Unreimbursed Medical or Dependent Care FSA.

Expenses that qualify for Unreimbursed Medical FSA reimbursement:

  • Acupuncturist’s fees
  • Alcoholism treatment
  • Ambulance service
  • Annual physical examinations
  • Chiropractic services
  • Contact lenses and solutions
  • Copayments
  • Crutches
  • Deductibles
  • Dental examinations
  • Dentures
  • Diabetic supplies
  • Diagnostic fees
  • Doctor visits
  • Durable medical equipment
  • Eye exams, glasses, and contact lenses
  • Eye surgery (cataracts, LASIK, etc.)
  • Eligible over-the-counter drugs with a prescription
  • Hearing devices and batteries
  • Hospital bills
  • Insulin
  • Laboratory fees
  • Mental health care
  • Obstetrical expenses
  • Oral surgery
  • Orthodontia
  • Orthopedic devices
  • Periodontics
  • Physician fees
  • Prescription drugs
  • Psychiatric care
  • Psychologist’s fees
  • Smoking cessation programs
  • Surgical fees
  • Travel to and from doctor's office
  • Wheelchair
  • X-rays

Expenses that DO NOT qualify for Unreimbursed Medical FSA reimbursement:

  • Vitamins and supplements
  • Membership fees to a fitness club, even if prescribed by a doctor for a specific medical condition, as dictated by the IRS
  • Cosmetic prescriptions and procedures, including teeth bleaching
  • Insurance premiums
  • Expenses incurred before you became eligible for the plan or, during any period you did not contribute to the plan
  • Eligible over-the-counter drugs without a prescription
  • Expenses paid by insurance; only necessary medical and dental expenses NOT paid by insurance will be reimbursed from the account

Expenses that qualify for Dependent Care FSA reimbursement:

  • Dependent care services (including wages and related taxes) provided in your home by a nanny, babysitter or housekeeper
  • Dependent care expenses incurred for services outside your home, provided they are incurred for the care of a qualifying dependent that regularly spends at least eight hours per day in your home
  • Dependent care provided outside your home, including qualified day care, day camp or other outside dependent/child care services, such as before and after school programs
  • Pre-school/nursery school expenses are eligible, even if the school also furnishes lunch and educational services
  • Expenses paid to a relative (child, parent, or grandparent of participant); however, the relative cannot be under age 19 or a tax dependent of the participant
  • Dependent care expenses incurred to enable the employee to find work
  • FICA and FUTA payroll taxes of the daycare provider

Please note that the reimbursement may not exceed the smaller of the following limits:

  • The maximum allowed under the plan
  • $5,000 if you are filing a joint tax return, or $2,500 if separate returns are filed
  • Your taxable compensation after all compensation reduction elections
  • If you are married, your spouse's actual or deemed earned income

Generally, eligible childcare costs include only those for the actual care of your dependent, not costs for education, supplies or meals, unless those costs cannot be separated.

Expenses that DO NOT qualify for Dependent Care FSA reimbursement:

  • Kindergarten fees
  • Elementary school expenses for a child in first grade or higher
  • Dependent care obtained for non-work related reasons
  • Expenses for overnight camp
  • Dependent care expenses incurred if your spouse does not work, unless your spouse is a full-time student or disabled
  • Any expenses you claim for the dependent care tax credit on your federal income tax return
  • Expenses provided by another organization or provided without cost
  • Care provided in a group care center that does not meet state and local laws
  • Cost for after-school educational programs (e.g. tutoring)
  • Expenses incurred before you become eligible to participate in the account

Source: irs.gov