If you have never shopped for FSA-eligible products online, it’s time to give it a try. For years, consumers have been shopping for everything from clothing to groceries to furniture and more through online retailers. In the process, shoppers have enjoyed convenience and lower costs on most items previously bought through brick-and-mortar retail stores.
It took a while, but more and more people are looking online to buy healthcare products. Many retailers sell FSA-eligible products and supplies online, and they allow Flexible Spending Account (FSA) participants to use their account-linked debit card as payment.
What to Know Before Visiting an FSA Online Store
Before shopping online with your FSA, it’s important to know how the accounts work and what products are FSA-eligible.
FSAs are employer-sponsored benefit accounts that allow workers to put aside pre-tax money to pay for out-of-pocket healthcare costs for themselves and their families. In most cases, the contributions are deducted from employees’ paychecks, and the accounts are usually managed by a third-party administrator. Account holders can withdraw the money at any time during the year until all the funds are used.
If you have an FSA, the savings come from not paying taxes on the money you deposit into your account. The more you contribute to your FSA, the greater your savings. In 2023, individuals can contribute a maximum of $3,050.
Whether bought in a traditional store or an online FSA shop, FSA funds can only be used to pay for eligible healthcare products and services. Let’s take a quick look at FSA-eligible products.
What is an FSA-eligible product?
The IRS has established certain regulations governing what is and is not an FSA-approved expense. Fortunately, there are hundreds of qualified healthcare products and services. These include medicines and prescription drugs, including a wide variety of over-the-counter medications and medical supplies, such as blood sugar test kits, bandages, and crutches. Or, you can use FSA funds to pay for healthcare deductibles and copayments, but not insurance premiums.
FSA Shopping for Eligible Items
Your FSA covers wide range of commonly used healthcare products. These include:
- First aid supplies (bandages, first aid kits, etc.)
- Contact solution and cases
- Shoe inserts
- Orthopedic braces
However, you may be surprised to learn what does and does not qualify as an FSA-eligible expense. In general, the IRS looks favorably on products and services that treat health problems. Specifically, those items and services used for “diagnosis, cure, mitigation, treatment, or prevention of disease, and for the purpose of affecting any part or function of the body.” This can include alternative treatments such as acupuncture and chiropractic treatments.
The IRS looks less favorably on what are considered cosmetic or non-essential treatments. If you’re considering a procedure such as a tummy tuck, liposuction, breast augmentation or teeth whitening, don’t count on using FSA funds to pay for it. If a procedure isn’t medically necessary, it probably won’t qualify as an FSA-approved expense.
Here’s how you can maximize your healthcare savings through online FSA shopping.
FSA Shopping Made Easy
If you know which FSA-approved products you need, you can visit any business that sells them. However, you will probably find the experience to be easier and more convenient by shopping at an FSA online store. If you have never engaged in online FSA shopping, a good place to start is by visiting FSAStore.com.
It is the only FSA store online that specializes in selling FSA-approved products and services and nothing else. Their website separates FSA-approved items into two categories – those that require a medical prescription and those that do not. They also provide a complete alphabetized listing of all FSA-eligible products and procedures, as well as common medical procedures that don’t qualify. The site also lets you search by account and eligibility types, and includes useful descriptions of each product or service so that you know exactly what you’re getting.
Other large retailers, such as Walmart, Target, Walgreens, and CVS, also offer special sections on their websites for FSA shoppers. Even Amazon.com now has its own FSA shop. These companies (along with many others) also provide listings of the FSA-eligible items they carry to make your FSA online shopping easier.
Tips for FSA Online Shopping
- Save all FSA receipts. This is true whether you buy at a brick-and-mortar store or an FSA shop. If your benefits manager or the IRS has questions about any of your FSA purchases, the receipts will provide documentation to support the transaction.
- Take advantage of your FSA debit card. These days, many FSA plans provide a dedicated debit card to be used specifically for FSA approved purchases. Paying with a credit card or regular debit card requires you to pay out of pocket. Then you have to submit a claim, which must be approved. Once that is complete, you have to wait to get reimbursed for the expense. In contrast, paying with an FSA card takes the money directly out of your FSA. You don’t pay out-of-pocket, which generally means you don’t have to submit a claim. And you don’t have to wait for reimbursement. Keep in mind, your benefits administrator may ask for receipts to verify your expenses.
- Don’t assume a product or service is not eligible for FSA. It always pays to check before paying for an item out of pocket. Here are 14 approved products/services that you might think wouldn’t qualify.
- Don’t forget the FSA spending deadline. Unlike HSAs, FSAs have a “use it or lose it” component that requires forfeiting any unused funds at the end of the year. Some employers will allow you to roll over $610 to the next year. But any remaining funds are returned to the employer. Try these creative last-minute ways to spend FSA funds before the deadline expires.
FSA shopping online is an easy and convenient way to maximize your healthcare savings. All you need is a debit or credit card and an Internet connection and you’re ready to start saving.