What Are the Different Spending Rules for Flexible Accounts?


Quick Answer

A person uses money in a Flexible Spending Account to pay for out-of-pocket health care-related costs, such as medical expenses, dental expenses, copayments and deductibles, but the person may not use money in an FSA to pay for health insurance premiums, according to Healthcare.gov. A person may only open an FSA as part of an job-based health plan, and the person's employer may contribute money to the account.

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Full Answer

A person may submit a claim for medical expenses that he paid this year, regardless of when he received the services, describes the Internal Revenue Service. He may not file for reimbursement for medical expenses that his insurance company paid. The Internal Revenue Service defines medical expenses as the costs to diagnose, cure, mitigate, treat or prevent any condition that affects any body part or bodily function. Equipment, supplies and diagnostic tools are also qualifying medical expenses.

Some legal fees may be reimbursed from an FSA, continues the Internal Revenue Service. These legal fees must be necessary to authorize treatment for mental illness to qualify for reimbursement. Fees for a guardianship, conducting the affairs of the person receiving treatment or any other legal fees not directly related to medical care do not qualify for reimbursement.

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