To get FSA reimbursement, you submit an itemized receipt for an eligible expense incurred during your plan year to your plan administrator, either by swiping the FSA debit card at the point of sale or by filing a claim through the online portal, mobile app, or by mail. For 2026, you can set aside up to $3,400 in a health care FSA and up to $7,500 per household in a dependent care FSA, and every dollar comes out of your paycheck before federal income and payroll taxes.1FSAFEDS. New 2026 Maximum Limit Updates With a health care FSA, your full annual election is available for reimbursement on day one under the uniform coverage rule, so a $2,000 procedure in January can be reimbursed in full even though you’ve only had one paycheck deducted. Dependent care accounts don’t work that way; they can only reimburse up to what you’ve actually contributed so far.
What Health Care Expenses Qualify
The IRS uses the medical expense definition from Internal Revenue Code Section 213(d): an expense qualifies if it diagnoses, treats, prevents, or alleviates a physical or mental health condition.2Office of the Law Revision Counsel. 26 USC 213 – Medical, Dental, Etc., Expenses Doctor and dentist copays, prescription medications, eyeglasses, contact lenses, hearing aids, blood pressure monitors, crutches, and bandages all qualify on a plain receipt.
Since the CARES Act took effect in 2020, over-the-counter medications like pain relievers, cold medicine, and allergy treatments qualify without a prescription, and menstrual care products became eligible.3Internal Revenue Service. IRS Outlines Changes to Health Care Spending Available Under CARES Act
Cosmetic procedures that don’t treat a medical condition stay out. Teeth whitening, hair transplants, and elective cosmetic surgery aren’t reimbursable at any price.
Items That Need a Letter of Medical Necessity
Some products sit between medical treatment and general wellness. The IRS treats these as dual-purpose and reimburses them only when a doctor confirms in writing that you need them for a specific condition. Massage therapy, vitamins, dietary supplements, air purifiers, and humidifiers commonly fall in this bucket. Yoga classes and fitness trackers can qualify with the same letter.
The letter itself is short. Your doctor gives a diagnosis or diagnosis code, identifies the recommended treatment or product, and signs the form. You generally only need to submit it once per condition, not with every refill.
Orthodontia
Orthodontia trips people up because treatment spans plan years. You can pay a lump sum up front or set up monthly payments, and both work.4FSAFEDS. Orthodontia Quick Reference Guide If you pay in full during one plan year, submit the whole amount against that year’s balance. If you spread payments, each one is reimbursable in the year you make it. Recurring monthly payments are a practical way to use FSA funds across consecutive years instead of trying to time one big expense.
What Dependent Care FSA Expenses Qualify
A dependent care FSA is a separate account. It covers care that lets you and your spouse work, look for work, or attend school full time: daycare, preschool, before- and after-school programs, summer day camp, nanny or babysitter costs, and adult day care for an elderly or disabled dependent who lives with you.5FSAFEDS. Dependent Care FSA
Overnight camps, private school tuition, and food or clothing costs don’t qualify. The expense has to be for care, not education. And the care must be necessary for you to earn income. If one spouse doesn’t work and isn’t looking for work or in school, the household generally can’t use a dependent care FSA.
Who Counts as an Eligible Dependent
The dependent rules differ between the two account types, and the ACA’s well-known age-26 rule for health insurance does not carry over to FSAs.
For a health care FSA, you can claim expenses for yourself, your spouse, and your tax dependents under Internal Revenue Code Section 152. A qualifying child must be under 19 at year-end, or under 24 if a full-time student. A child who is permanently and totally disabled qualifies at any age. A qualifying relative must meet income and support tests.6Office of the Law Revision Counsel. 26 USC 152 – Dependent Defined You can also include medical expenses for someone who would be your dependent except that they filed a joint return or had too much gross income.7Internal Revenue Service. Publication 502 (2025), Medical and Dental Expenses
For a dependent care FSA, the rules are narrower. The child must be under 13 when the care is provided. An older dependent or spouse qualifies only if they’re physically or mentally unable to care for themselves and live with you.5FSAFEDS. Dependent Care FSA
Paying With the FSA Debit Card
Most plans issue a debit card linked to your account balance. Swiping it at a doctor’s office, pharmacy, or dentist is the fastest route: no out-of-pocket spending, no reimbursement claim afterward. The card doesn’t erase your documentation obligations, though.
Some merchants use an Inventory Information Approval System (IIAS) that identifies FSA-eligible items at the register and verifies the purchase automatically. Compliant pharmacies, grocery stores, and large retailers can process card transactions without asking you for a receipt later. When auto-substantiation doesn’t happen, either because the merchant isn’t IIAS-compliant or the system flags the charge for review, your plan administrator will contact you and request an itemized receipt. Ignoring that request can result in the charge being reversed and treated as a taxable distribution.
Save every receipt from every swipe, including at pharmacies. If the administrator asks for proof weeks later and the receipt is in the trash, you’re stuck.8FSAFEDS. Eligible Health Care FSA (HC FSA) Expenses
Filing a Manual Claim
When you pay out of pocket, the administrator needs an itemized receipt showing the patient’s name, the date of service, a description of the service or product, and the amount charged. Credit card statements and cancelled checks don’t work; they show that you paid something but not what you paid for.8FSAFEDS. Eligible Health Care FSA (HC FSA) Expenses
If insurance covered part of the bill, you’ll also need the Explanation of Benefits from your insurer. The EOB shows what insurance paid, what was applied to your deductible, and the remaining balance you owe. Without it, the administrator can’t confirm you aren’t getting reimbursed twice for the same charge.
For items that require a letter of medical necessity, include that letter with your first claim for each diagnosed condition. Later claims for the same item and diagnosis generally don’t need a new letter.
How to Submit
Most administrators offer an online portal where you upload receipt images and enter the date of service, provider name, and dollar amount. Mobile apps from the major administrators let you photograph a receipt and submit in under a minute, which is worth doing while you’re still standing in the provider’s office. Some administrators also accept claims by mail: print the claim form from the benefits portal, attach copies of your receipts and any EOB, and send it to the address on the form.
However you submit, the administrator should send a confirmation number or email once the claim is logged. If nothing arrives within a few business days, follow up. Claims that vanish into a processing queue without a tracking number are the ones that get lost.
Reimbursement timing varies. Most administrators process approved electronic claims within one to five business days. Mailed claims take longer on both ends.
If a Claim Is Denied
Denials happen for predictable reasons: the receipt was missing key details, the item isn’t on the eligible expense list, the administrator needs a letter of medical necessity, or the date of service falls outside the plan year. The denial notice should tell you exactly what went wrong, and often you can fix the problem by resubmitting with the missing document.
If you think the denial itself is wrong, you have the right to a formal appeal. Federal rules under ERISA require group health plans to give you at least 180 days from the denial notice to file. Your appeal should include a written explanation of why you disagree, copies of supporting documentation like a physician’s letter or EOB, and a reference to the IRS regulation or plan provision that supports your position. The plan administrator generally has 60 days to decide, with a possible 60-day extension.9eCFR. 29 CFR 2560.503-1 – Claims Procedure
Deadlines That Decide Whether You Get Your Money
FSA deadlines are where money quietly disappears. The core rule: expenses must be incurred during the plan year to be reimbursable. Prepaying for a future procedure or settling an old bill from a prior year doesn’t count. The service itself must happen while your plan is active.
The default is use-it-or-lose-it. Any unspent balance at the end of the plan year is forfeited. Your employer’s plan may soften this rule in one of two ways, but not both:10Internal Revenue Service. Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans
- A grace period of up to two and a half months after the plan year ends, during which you can still incur and pay for eligible expenses using the prior year’s balance.
- A carryover of up to $680 in unused health care FSA funds into the next plan year for 2026. Anything above $680 is still forfeited.
Separate from both is the run-out period, a window after the plan year (or grace period) ends during which you can submit claims for expenses you already incurred. The run-out doesn’t give you more time to spend; it gives you more time to file the paperwork. Most plans set it at 60 to 90 days. Check your plan documents for the exact date. Missing the run-out means you permanently lose the ability to claim funds you already spent on time.
The number-one reason people forfeit FSA money isn’t ineligible spending. It’s missing a deadline they didn’t know existed. Put the grace period, carryover cutoff, and run-out date on your calendar the day your plan year starts.
Coordinating an FSA With an HSA
If you’re enrolled in a high-deductible health plan and want to contribute to a Health Savings Account, a standard health care FSA creates a problem. The IRS treats you as ineligible for HSA contributions if you’re covered by a general-purpose health FSA that can reimburse a broad range of medical expenses.10Internal Revenue Service. Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans
The workaround is a limited-purpose FSA, which restricts reimbursement to dental and vision expenses only.11FSAFEDS. Eligible Limited Expense Health Care FSA Expenses Because it doesn’t cover general medical costs, it doesn’t disqualify you from HSA contributions. You get pre-tax dollars for dental and vision through the limited-purpose FSA and pre-tax dollars for everything else through the HSA.
One narrow exception matters for anyone rolling from a general-purpose FSA into an HSA: if your FSA balance is exactly zero at the end of the plan year, coverage during a grace period won’t disqualify you from HSA contributions.10Internal Revenue Service. Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans Even a dollar carrying over during a grace period puts your HSA eligibility at risk.
What Happens If You Leave Your Job
Your health care FSA coverage generally ends on your last day of employment, or the end of that month depending on the plan. You can still submit claims for eligible expenses incurred while you were actively employed, and the plan’s run-out period, usually 60 to 90 days from your coverage end date, applies. After that, any remaining balance is forfeited.
The uniform coverage rule creates an interesting dynamic on the way out. Because your full annual election was available from day one, you may already have been reimbursed for more than you contributed through payroll deductions. Elect $3,400, spend $2,500 in February, leave in March after contributing only $850, and you’ve come out ahead. Your employer cannot recover the difference.
If you’ve contributed more than you’ve spent, the remaining balance disappears unless you elect COBRA continuation coverage for the FSA. COBRA is available from employers with 20 or more employees, and you have 60 days from your qualifying event to elect.12U.S. Department of Labor. FAQs on COBRA Continuation Health Coverage for Workers COBRA lets you keep incurring and claiming FSA-eligible expenses through the end of the plan year, but you pay the full contribution amount plus a 2% administrative fee with no employer subsidy. For most people, COBRA for an FSA only makes financial sense when the remaining balance clearly exceeds what you’d pay to maintain coverage.
Dependent care FSAs work differently after termination. You can still submit claims for expenses incurred during the plan year, but only up to what you’ve actually contributed through payroll. The uniform coverage rule doesn’t apply.