Final Stretch for Flexible Spending Accounts
SAN DIEGO — As we near the year’s end, many are considering how to make the most of their Flexible Spending Accounts (FSAs). However, it’s worth noting that not all items at the pharmacy are eligible for coverage.
With cold and flu season kicking in, pharmacies like Proactive Care Pharmacy in Linda Vista are seeing increased traffic. Besides filling prescriptions, they often field questions about what qualifies as an eligible expense under FSAs.
Generally, FSAs are set up through your employer, allowing you to allocate pre-tax dollars for certain medical expenses incurred out-of-pocket. Starting in 2025, individuals can contribute as much as $3,300, with joint taxpayers able to set aside up to $6,600.
The account covers a broad spectrum of items including sunscreen, childbirth classes, masks, and various dental and vision expenses.
Pharmacist Manager Ann Pham highlighted several popular products that FSAs can cover. “They can be used for various over-the-counter items like pain relievers, cold medications, allergy treatments, antacids, eye drops, and first aid supplies,” she explained.
The account also includes certain medical equipment and at-home tests, like blood pressure monitors, COVID tests, and diabetes supplies. The U.S. Office of Personnel Management lists over 300 covered and non-covered items on their website.
Pham suggests that even if you’re feeling well now, it’s a good idea to stock up on necessary items now rather than waiting, since unused funds typically don’t carry over to the next year.
“Tylenol and cough medications can range from $5 to $20, which, when added up, can lead to spending hundreds annually,” she said.
If you’re uncertain about whether a specific item is eligible, it’s best to consult your pharmacist. Pham mentioned that you can usually find out as soon as you scan the item.
Still, it’s important to use your FSA wisely, only purchasing approved items. Thomas Boles, owner of Telesis Tax and Financial, noted that any errors in spending could have repercussions for your 2025 tax return. “It’s essential to keep track,” he said. “Any unqualified purchases need to be resolved, as they can complicate your tax situation since the funds are pre-tax to begin with.”
If you’re considering modifying your FSA contributions, Boles advises checking with your benefits department, as changes can typically only be made during your company’s open enrollment period.
