Maximizing Your FSA: Eligible Expenses and the Spend-Down Plan

FSA eligible expenses are the medical, dental, vision, and prescription costs the IRS allows you to pay from a flexible spending account — pre-tax dollars that never appear on your W-2. The catch is structural: unused balances are forfeited at plan year end, subject only to a modest grace period or carryover your specific plan may allow. Maximizing an FSA therefore has two halves: electing close to what you will actually spend, and knowing how wide the eligible list really is.

How much to elect, honestly

Start from last year's actual spending, not a guess. Add up copays, coinsurance, dental work you already know is coming (orthodontia installments are perfect FSA fuel), glasses or contact renewals, therapy copays, and prescriptions. Then subtract known one-timers. Contribution limits have sat around $3,000 to $3,300 per employee in recent years, but the right number for you is the one that zeroes out — every unspent dollar returns to the employer, while every dollar routed through the account skipped your marginal tax rate, often 22 to 32 percent.

                Last year's copays and coinsurance: $1,150
Known orthodontia installment due: $1,200
New glasses + contact fitting: $420
Therapy copays, weekly x 12: $360
Total planned: $3,130 -> elect $3,100, review quarterly
              

The commonly missed eligible expenses

• Sunscreen SPF 15 and higher, plus aftersun care marketed with medical claims.
• Breast pumps and nursing supplies, along with lactation consultant fees.
• Mileage driven to medical appointments at the IRS medical rate published each year.
• Acupuncture, chiropractic visits, and physical therapy copays.
• Reading glasses, contact lens solution, and eyeglass repair kits.
• Orthodontia, including adult braces and clear-aligner installments.
• Over-the-counter medicines, which no longer require a prescription under current rules.
• Menstrual care products, added to the eligible list in recent years.
• Mental-health copays for therapy, including clinician-prescribed digital programs.

What never counts

General wellness items fail the test: gym memberships, vitamins taken for prevention, cosmetic procedures, teeth whitening, and non-medical massage. The boundary is treatment versus general health — a dermatologist-prescribed medicated cream qualifies; the cosmetic moisturizer beside it does not. When in doubt, your administrator's searchable expense list is authoritative for your plan.

The deadline mechanics that surprise people

Your summary plan description names which feature applies — grace period and carryover are mutually exclusive, and neither is guaranteed. Run-out time for submitting last year's receipts also varies, commonly 90 days after the plan year closes, so submitting March receipts for December care is normal rather than late.

The Q4 spend-down routine

Set a recurring October reminder to open the FSA portal and read the remaining balance. From there: schedule deferred dental cleanings or replacement glasses, refill standing prescriptions early where allowed, book year-end therapy or physical-therapy sessions, and submit any paper claims still sitting in a drawer. A balance of $400 in October is fully drainable; the same $400 discovered December 29 rarely is.

Pairing the FSA with other accounts

You cannot contribute to an HSA and a general-purpose FSA in the same year — but a limited-purpose FSA, restricted to dental and vision expenses, coexists with HSA enrollment at many employers and pairs beautifully: drain it on glasses and orthodontia while the HSA compounds untouched. Dependent-care FSAs are a separate account entirely, with their own limit and rules. Election details vary by employer — confirm which flavors yours offers during open enrollment.

Special situations worth planning around

1. Job-change years: front-load known expenses into employed months, since contributions stop at separation.
2. Maternity years: delivery costs alone can justify maximum elections — but only if you elect before pregnancy is known to the plan year.
3. Orthodontia spans: multiyear treatment plans map beautifully onto annual elections; get the provider's installment schedule in writing.
4. COBRA transitions: FSA coverage during continuation follows employer-plan rules — see the COBRA timeline for how the clocks interlock.
5. Two-earner households: you cannot double-elect health FSAs at both employers; coordinate who covers what.

Each situation rewards one behavior: modeling the expense calendar before the election deadline rather than after. The planner below turns a rough list of appointments and procedures into a month-by-month spending curve, which makes both the election number and the fourth-quarter drain obvious. Election mechanics vary by employer plan — confirm your plan's grace-period versus carryover treatment before finalizing amounts. Pairing decisions with HSA years live in the limited-purpose FSA discussion, and timing the election itself belongs to the open-enrollment deadline system.