What’s a flexible spending account and can I use it to help cover the cost of eye care?
A flexible spending account (FSA) is a special account that you can put money into and then use to pay for eligible out-of-pocket health-related expenses. You do not need to pay taxes on the funds you contribute to your FSA, which is what makes it an attractive option for many Americans. (See more information about how FSA’s work in this document released by the IRS)
Eye care, including vision correction, is considered an FSA-eligible expense. This applies to services and products. FSA-eligible vision care services include routine eye exams and medically-necessary treatments such as eye surgery. FSA-eligible eye care products include contact lenses, prescription eyeglasses, eye drops, contact lens solution and cases, and even eyeglass repair kits.
FSAs can be used to pay for certain medical and health-related expenses, including co-pays and deductibles, for you, your spouse and your dependents. It is a flexible and often beneficial way of helping to cover costs of necessary health care services or products that may not have full coverage under a health insurance plan.
But there is a catch…
Generally, the money you’ve contributed to your FSA must be used within the plan year. There may be exceptions to this, depending on your employer. Some FSA users may be able to carry over up to $500 to use in the following year and/or may be given a “grace period” of up to two additional months to use the money in an FSA before it expires, and a new plan year begins.
The fact remains: Flexible spending accounts can be a wonderful way to help save money by paying for eligible expenses with income that is untaxed. Use it, or lose it – most FSA plans are valid from January 1 – December 31. The end of the year is a great time to use any remaining balance in your FSA towards eligible expenses