Does a Flexible Spending Account (FSA) Cover Lasik?

Flexible spending accounts (FSAs, also known as flexible spending arrangements) are special savings accounts that can be set up through your employer. They can be used to pay for certain approved services and provide you with a number of tax benefits. You can set aside some of your regular earnings to an FSA along with contributions from your employer if it makes them.

You can use FSAs to pay for qualified care services for children under 12 and qualifying adults. Or they can be used to reimburse you for qualified dental and medical expenses. Fortunately, LASIK surgery can be covered if your opthalmologist determines it’s medically necessary.

Is LASIK a Qualified Medical Expense?

A qualified medical expense is any cost paid toward the diagnosis, treatment, cure, or prevention of a disease. Costs include payment for services to doctors, surgeons, dentists, and other medical specialists, as well as those paid for equipment, supplies, and other products. Health insurance premiums and transportation costs to get you to and from medical care are also deemed qualified medical expenses.

If you’re considering laser eye surgery and want to use your FSA to pay for it, you’re in luck. According to the Internal Revenue Service (IRS), it can qualify as a medical expense for an FSA. To qualify, you must make an appointment with an ophthalmologist to determine that the procedure is medically necessary.

This means you can use the distributions from an FSA to pay for qualifying LASIK procedures. LASIK is one of the most popular laser eye surgery procedures in the United States. It is used to correct eye and vision problems by using laser refractive techniques. People get the procedure done to correct nearsightedness, farsightedness, and astigmatism. Keep in mind, though, that LASIK is just a brand name. There are other similar procedures you can opt for under FSA guidelines.

Advantages and Disadvantages of a Flexible Spending Account (FSA)

There are many pros and cons of having and using an FSA to cover your medical and dental expenses. The following are the most common benefits and drawbacks.

Advantages

• You can use your FSA for other vision-related expenses, such as glasses, contact lenses, eye exams, and optometrist visits.
• FSA funds are taken out of your paycheck before taxes, saving you money on expenses you would pay for anyway. It also reduces your taxable income at the end of the year.
• FSAs are only available through employer-sponsored health care plans, which means that employers can also contribute.

Disadvantages

• FSA funds must be used by the end of the calendar year, or they will be forfeited to your employer. Employers can provide a grace period of up to two and a half months after the end of the plan year for employees to use their remaining FSA funds.
• Some employers may not provide a grace period for their employees’ FSAs. That’s because it’s entirely up to them whether to offer one and, if they do, how long it lasts.

Plan Ahead to Use an FSA for LASIK

According to the Refractive Surgery Council, the cost of LASIK procedures depends on the location. However, it typically averages $2,200 per eye.

Procedures are considered elective operations. An ophthalmologist can provide you with an estimate of how much your procedure will cost. FSA contributions are capped at a maximum of $3,200 for 2024 and $3,300 for 2025. By delaying the procedure, you could have fewer out-of-pocket expenses.

LASIK is not covered under medical insurance. If you have vision insurance, it may only provide you with a small discount on the surgery. This leaves your FSA as the only means of paying for LASIK unless you pay out-of-pocket or take out a medical loan.

The Bottom Line

Using your FSA to pay for LASIK surgery can be a smart use of your pre-tax health funds as long as you plan ahead and get a medical diagnosis from your ophthalmologist first. Even if you end up paying for some of the procedure out of pocket, you won’t risk losing your FSA funds at the end of the year.