A flexible spending account is an employer-provided account where a monthly sum is deposited to pay for medical needs that are not covered by a health insurance plan.

FSAs have to be used within the current tax year. They can be charged to pay for preapproved (with a prescription) eye care components, such as glasses, frames, contact lenses, accessories, and even eligible surgery options (although FSAs may not cover a whole operation).

What Is an FSA?

HealthCare.gov explains that “FSA” stands for flexible spending account or flexible spending arrangement. This is a special kind of account in which a person deposits money that can be used to pay for certain out-of-pocket health care expenses.

FSAs can be activated and accessed through an employer-provided health plan. With an FSA, a person can pay for deductibles, copayments, some medications, and other preapproved health care expenses. The money that goes into an FSA is automatically deducted from each paycheck.

Health insurance blocksUsing an FSA can also lead to a tax reduction because people are not required to pay taxes on the money they put into their FSAs. This means that they will save an equal amount to the taxes they would otherwise have to pay on the amount of their FSA investment. As a result of this, FSAs should not be thought of as tax-deductible since the accounts are maintained through salary deferrals.

Employers can also make contributions to flexible spending accounts, but this is not mandatory. A person can access their FSA by asking their employer to submit a claim. They will require proof of the medical expense and an official statement that the expense is not covered by their current health insurance plan. If approved, the patient will receive a reimbursement for their expenses.

The eligible health care expenses covered by flexible spending accounts are those that are exclusively not covered by insurance. Every employer will offer a slightly different FSA plan, but there is usually a wide variety of items and services that employees can purchase through the FSA account.

FSA Specifics

  • Flexible spending accounts will cover most out-of-pocket expenses, but the specifics should be clarified with your program administrator.
  • By law, an employer cannot offer an FSA worth more than $2,650.
  • A person can use their FSA funds to pay for preapproved medical and dental expenses for themselves, their spouses, and any dependents.
  • FSAs can be used to pay for copayments and deductibles, but not for insurance premiums.
  • FSAs can be used to pay for prescription medications and over-the-counter medications with a doctor’s note.
  • FSAs can cover the costs of certain kinds of medical equipment, such as crutches, bandages, and diagnostic devices.

A person using an FSA is expected to use the money in it within the plan year on a “use it or lose it” basis. Employers have two options they can offer: a grace period of up to 2.5 extra months to use the money in the FSA, or they can allow the employee to carry over no more than $500 to use in the following year. By law, employers are required to offer one of these options, but they cannot offer both.

If the grace period expires with money still left in the FSA account, that money will no longer be available to use. For this reason, people using FSAs should budget their investments carefully, not exceeding the amount they think they will need to spend on copayments, coinsurance, medications, and the cost of health-related equipment.

How to Use FSA for Eye Vision Care

Vision care like eye surgery is eligible for FSA funding through a sub-category of limited purpose FSA account (LPFSA). The LPFSA account allows you to pay for eye care expenses before you dip into your insurance deductible. Some of the eye care costs an FSA will help you settle include:

  • Prescription eyeglasses and sunglasses
  • Prescription and non-prescription reading glasses
  • Contacts and contact lens care
  • Eye examinations and appointments

Eye Exams and Appointments

Even if you don’t wear contact lenses or glasses, you can use the money in your FSA account to pay for annual eye exams, which experts recommend. If the doctor determines you need vision care accessories during the exam, the FSA gives you various options.

The account will cover the cost of anti-reflective coating on different types of eyewear, including bifocal lenses, safety lenses, specialty lenses and reading glasses (if specified from the outset).

In other words, you don’t need vision insurance to see an eye doctor – and you don’t need insurance to pay for the visit. Eye doctors, like many physicians, have special rates for non-insured patients. You can use your FSA for this payment.

Can You Use FSAs for Glasses, Contacts, or Eye Surgery?

Yes, vision care is approved for flexible spending accounts, through a limited purpose flexible spending account (or LPFSA). This is a special type of FSA that employees can use when they have a health savings account.

Under normal circumstances, the IRS allows people to have a health savings account or a flexible spending account, but not both. However, if your employer allows it, you can have both a health savings account and a limited purpose flexible spending account, the latter of which can be used to pay for vision expenses before you reach your insurance deductible.

If a treatment is deemed medically necessary (like eye surgery, laser eye surgery, corneal keratotomy, or even routine eye exams), it will fall under LPFSA guidelines. Not everyone will qualify for eye surgery, but for those who do, their procedures would be FSA-eligible. However, the FSA/HSA might not cover the entire cost of the surgery.glasses resting on top of stack of books

Most often, you can pay for LASIK and other forms of laser eye surgery with the funds from your FSA. Since LASIK usually costs more than the maximum amount you can contribute to your FSA, the funds won’t fully cover the cost of the procedure. But you can greatly reduce your out-of-pocket cost by paying for a portion of the cost with these pre-tax dollars.

Even eye care products, such as eye drops, prescription eyeglasses (and their repair kits), and contact lenses (as well as solutions and cases), can be paid for with a flexible spending account.

The money invested in an FSA account can pay for a vision exam, and it can give people a wide variety of choices when it comes to their vision care accessories. For example, people looking to buy prescription eyeglasses can choose between bifocal lenses, reading glasses, specialty lenses, and even safety lenses. Anti-reflective or light protective coating for lenses can also be specified at the point of sale.

Sunglasses, Contacts & Accessories

Sunglasses, prescription and nonprescription, can be purchased through an LPFSA, with further customization options, such as colors, polarized, and mirrored sunglasses. Sport-specific sunglasses are also available.

Frames are an important part of eyeglasses choice and wear, so they also fall under FSA spending. Different shapes, materials, and colors are available for purchase through an FSA account, allowing people to choose frames for safety or style.

Contact lenses can also be bought with an LPFSA account, whether short-term disposable lenses (enough to last you for a whole year), bifocal, multifocal, or toric lenses (for astigmatism). All you need is a valid prescription.

Lastly, accessories — like saline solutions, contact lens solution, eyeglass cleaners, and wipes and rewetting drops — can all be purchased with the funds in a flexible spending account.

Check with your employer for a full list of products and services to which you can apply your FSA funds.

The Details of Using FSAs for Eye Care

Before you start spending from your FSA account, check the details of your individual limited purpose FSA plan with your employer. Once you know the guidelines, here is the guide of utilizing FSA for your eye care:

  • Schedule an appointment with your optometrist.
  • Check out if your eye doctor has the vision care accessories eligible for FSA funding or shop at FSA-approved online stores.
  • Keep your receipts and submit them for reimbursement before the plan year ends.

You can use FSA bank by scheduling an eye exam and billing it to the account. Suppose the doctor discovers any problem requiring upgrading eyewear or referral to another expert for further evaluation, the FSA will settle the cost of your vision needs at least partially.

For those who haven’t had eye exams in a while, the FSA funds can pay their eye care insurance deductibles.

FSA vs. HSA for Eye Care

Both FSA and HSA accounts hold money that you can use to pay for out-of-pocket health expenses, including vision care, throughout the year. But the IRS does not allow you to have the two accounts simultaneously under normal circumstances.

Traditionally, the money you deposit into either FSA or HSA account comes from your paycheck at the end of every pay period. You don’t pay taxes – state or federal – for any of the money you send to these accounts. These funds are never taxed, even when you spend them.

From eye exam co-pays, prescription glasses to contact lenses and accessories, HSA and FSA will pay for all these vision products.

The two plans vary in different aspects. First, the maximum amount you can contribute to an FSA account is lower than the HSA. In 2021, FSA’s maximum annual contribution is $2,750, while it’s $3,550 for HSAs.

An HSA plan is associated with a high-deductible health plan. The FSA is PPO-associated.

References

Using a Flexible Spending Account (FSA). HealthCare.gov.

Are Flexible Spending Account (FSA) Contributions Tax Deductible? (June 2019). Investopedia.

It's Time To Use -- Or Lose -- Your 2017 FSA Money. (November  2017). CBS News.

How to Use a Limited Purpose FSA. (June 2019). Investopedia.

How to Use Your FSA and HSA for LASIK Surgery: 2019 Update. (December 2015). American Refractive Surgery Council.

At Last, Sunglasses Designed for the Sport You Love. (September 2019). Los Angeles Times.

14 Unexpected Things You Can Buy With Your FSA. (November 27, 2019). CNET.

20 Ways to Use Up Your Flexible Spending Account. (September 2019). Investopedia.

Using a Flexible Spending Account (FSA). HealthCare.gov.

How to Use Your FSA and HSA for Laser Vision Correction: 2021 Update. (October 11, 2021) American Refractive Surgery Council.

FSA and HSA Vision Resources. All About Vision.

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