Note changes for 2020 Additional OTC items now reimbursable.

Health FSA reimbursement options:

IRS rules-OTC expenses
IRS rules-Child's health expenses
Orthodontia reimbursement option

Qualifying health care expenses

Qualifying photo of medicine islehealth care expenses are those that are incurred by the employee, the employee's spouse, or the employee's qualifying child or qualifying relative during the plan year for medical care (as defined in Section 213(d) of the Internal Revenue Code), excluding all insurance premiums and long-term care expenses. Only the portion of the expenses you owe after insurance payments can be claimed. See maximum annual health care expense claim limits.

Qualifying health care expenses include amounts incurred for the diagnosis, cure, mitigation, treatment, or prevention of disease, and for treatments affecting any part or function of the body. The expenses must be primarily to alleviate or prevent a physical or mental defect or illness.

Expenses qualify for the medical FSA based on when they are incurred, not when paid.


IRS Rules for OTC Medications

Rx FSA only reimburses expenses of over-the-counter (OTC) drugs, medicines or biologicals (Additional OTC items now reimbursable). Equipment, supplies and diagnostic devices such as bandages, hearing aid batteries, and blood sugar test kits will remain eligible for reimbursement without a prescription.

Though the specific list of items affected has not been completely assessed, the following categories of items do not require a doctor’s prescription Additional OTC items now reimbursable:

  • Acid Controllers
  • Allergy & Sinus
  • Anti-Diarrhea Products
  • Anti-Gas Products
  • Anti-Itch & Insect Bite Products
  • Baby Rash Ointments
  • Cold Sore Remedies
  • Cough, Cold & Flu Products
  • Digestive Aids
  • Feminine Anti-Fungal/Anti-Itch
  • Hemorrhoid Remedies
  • Laxatives
  • Motion Sickness
  • Pain Relief
  • Respiratory Treatments
  • Sleep Aids & Sedatives
  • Stomach Ailment Remedies

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IRS Rules for Coverage of Your Child's Medical Expenses

You may claim eligible medical expenses for your child through the end of the calendar year in which they reach 26.  Your child may be a son, daughter, adopted child, stepchild, or eligible foster child.  Children no longer have to be tax dependents in order for you to be reimbursed for their medical expenses.

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Eligible expenses include (Additional OTC items now reimbursable):

  • allergy relief
  • ambulance service
  • artificial insemination
  • artificial eye
  • artificial limb/teeth
  • bereavement & grief counseling
  • co-pays
  • contact lenses and solutions
  • Christian Science Practitioners fees
  • prosthesis
  • chiropractor’s fees
  • prescription co-payments/drugs
  • deductibles
  • dental expenses
  • dentures (bonding & sealants)
  • doctor’s fees
  • eyeglasses/contacts/LASIK eye surgery
  • feminine products
  • hearing aids- including batteries
  • insulin
  • medical alert bracelet
  • menstrual care products
  • midwife services
  • nursing services
  • orthodontia (braces)
  • over-the-counter reading glasses
  • oxygen
  • smoking cessation items
  • substance abuse treatment
  • psychotherapy & psychoanalysis counseling 
  • routine physical exams
  • smoking cessation 
  • transfer of medical records charges 
  • transportation expenses related to illness (see sample mileage claim)
  • vision care expenses

See Complete list of eligible expenses

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Orthodontia reimbursements

A participant who pays in a lump sum may claim the amount at once. Previously, participants were required to claim monthly payments. Claims may be made for a lump sum of the entire amount of the participant's liability (up to the annual limit). To be reimbursed for orthodontia, the following criteria must be met:

  1. The braces must have been placed (or the initial work provided) and must still be on the patient.
  2. You must submit proof of payment with your reimbursement request. The proof of payment can be a paid receipt from your provider, a credit card receipt or your credit card statement.

Call ASI at 800-659-3035 if you have questions about making a claim for orthodontia.

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Ineligible health expenses include (Additional OTC items now reimbursable):

  • cosmetic procedures*; e.g. face-lifts, skin peeling, teeth whitening, veneers, hair
  • replacement, removal of spider veins
  • non-prescription sunglasses
  • toiletries
  • expenses that are merely beneficial to your general health herbs, vitamins, and nutritional supplements (if purchased solely for general good health purposes)
  • long-term care expenses

* These do not generally qualify. For a medically necessary cosmetic procedure, enclose a note with the claim stating the existing medical condition and why the treatment is required.

See the FSA Summary Plan Description and FSA Plan Document for more details.

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illustrations of dental work, childcare, prescriptions, & eyeglasses
Flexible Spending Accounts

Reimbursement options

Carryover Option
(Health FSA only)

You can carry over up to $500 of your unused Health FSA balance from 2019 to 2020. You can use these funds for claims incurred through 12-31-2019. (see example)