As the year progresses, it’s important to be mindful of the funds within your flexible spending account (FSA) and health saving account (HSA). While HSA funds can roll over year to year, typically, the majority of FSA funds must be spent by the end of your plan year.
The Employee Benefit Research Institute calculates that around 50% of employees forfeited some of their FSA money in 2020 by not spending it down before their deadlines. The average employee lost $408 in funds.
When looking to spend your funds, there are a variety of options that are considered eligible expenses for both FSAs and HSAs.
Eligible FSA and HSA services and items
Below is a list of services and items that you might not have known were considered eligible expenses. You can spend your FSA and HSA funds on:
- Sunscreen with an SPF or 30+
- Breast pumps
- Heating pads
- Over-the-counter medicines
- Insect repellent
- Sleep deprivation treatment and medication
- Pain relief massages
- Tobacco cessation programs
- Menstrual care items
- Travel expenses when receiving medical care
- Genetic health tests
- Fees related to medical record transfers to new providers
Emotional support animal or service dog
The overall cost of a service or emotional support animal can range anywhere from $17,000-$40,000 from purchase to training expenses. Insurance won’t cover these costs, and many people are unaware that FSA funds can, as service and emotional support animals count as medical care.
It’s important to note that according to the ADA, service animals are dogs trained to perform disability-related tasks, whereas emotional support animals can be obtained through disability or a prescription from a medical professional.
An FSA can reimburse service or emotional support animal expenses, such as the cost of the animal, vet visits, grooming, training, and accessories to help the animal carry out disability-related tasks.