Eligible and Ineligible Expenses for FSA Accounts
Note: For additional information on eligible and ineligible expenses refer to the
Alphabetical Listing of Expenses or the Over the Counter Drug Reimbursement
Eligible Health Care Expenses
A Health Care FSA can be used to reimburse medical and dental expenses that qualify as
federal income tax deductions (whether or not they exceed the IRS minimum applied to
these deductions) under Section 213 of the tax code. Medical expenses that are not
deductible under Section 213 may not be reimbursed by a health FSA. Expenses may be
incurred by the employee or by the employee's spouse or eligible dependents (children,
siblings, parents and others for whom an exemption may be claimed under Section 152 of
the tax code). Examples of eligible health care expenses include:
Deductibles & co-payments
Health care expenses not reimbursed by your health plan
Routine physicals, well-baby care etc.
Dental expenditures not covered by insurance or other coverage
Non-covered expenses approved by the IRS
Ineligible Health Care Expenses
"Medical care" expenses as defined by Section 213 include amounts paid for the
diagnosis, treatment, or prevention of disease, and for treatments affecting any part or
function of the body. The expenses must be to alleviate or prevent a physical defect or
illness. Expenses for solely cosmetic reasons generally are not expenses for medical care.
Examples include face lifts, hair transplants, and hair removal (electrolysis). Also,
expenses that are merely beneficial to one's general health (for example, vacations) are
not expenses for medical care. Additional examples of ineligible health care expenses
After-tax payments for long-term disability plan coverage
Custodial care in an institution
Health club dues
Weight-loss or programs not prescribed by a physician for a particular condition
Eligible Dependent Care Expenses
Reimbursable dependent care expenses are expenses incurred for the care of an
employee's dependent(s) so that the employee and the employee's spouse can be gainfully
employed. For example:
Expenses must be necessary to enable you to work. If you are married, your spouse also
must work or be a full-time student for at least five months during the year.
Dependents must be under age 13 or physically or mentally unable to care for
themselves. They must be eligible to be claimed as dependents on your Federal Income
If you are divorced or legally separated, a child who is under age 13 or is
physically or mentally handicapped is eligible as a dependent as long as you
have legal custody, even if you are not entitled to the Federal income tax
Expenses for a day care center, summer day camp or preschool for your child. The
facility must be licensed under state or local law if it cares for seven or more children.
If the expenses are for a day care center, the center must comply with all state and local
laws and provide a tax identification or social security number
Expenses for an unlicensed day care center that cares for six or fewer children.
Payments cannot be made to someone you claim as a dependent on you Federal Income
Tax Return or to your child under age 19. But, payments can be made to a relative who
is not a dependent, even if he or she lives in your home
The cost of day care and housekeeping services in your home for your child or other
The cost of meals, regular* lunches and snacks, supplied by a daycare provider
Expenses at an adult day care facility (but not expenses for overnight, nursing home
If services are provided outside your home for eligible dependents over age 13 (for
example, for a parent or grandparent,), the dependent must spend at least eight hours per
day in your home.
Ineligible Dependent Care Expenses:
The Following Expenses Are Not Eligible For Reimbursement Under A Dependent Day
Daycare for a child aged 13 or older.
Expenses for any camp that includes overnight stays (expenses for summer day camp,
however, may qualify if the camp meets the criteria included in IRS Publication 503)
Kindergarten or school tuition (pre-school and before and after care is okay) for age 5 &
Expenses for any care provided to a qualifying individual by the participant's dependent
or child under age 19.
Tuition for private school.
Housekeeping expenses not related to dependent care.
The same expenses for which you claim a dependent care tax credit on your federal
income tax return.
The registration fees paid for daycare, summer camp, kindergarten, preschool, etc. The
only exception is the day camp or registration fees which are applied towards the first
payable bill. These are eligible once the initial bill has been paid and the service has been
The cost of meals while on field trips and outings or those meals included as part of the
cost of such trips.
Health care expenses for a dependent. These should be considered for reimbursement
through a Health Care FSA.