Flexible spending accounts (FSA) can be used to pay for qualifying LASIK procedures. LASIK is not the only laser eye surgery covered under an FSA but it is the most popular laser procedure in the United States.

Key Takeaways

  • Flexible spending accounts (FSA) can be used to pay for qualifying LASIK procedures.
  • LASIK is not the only laser eye surgery covered under an FSA but it is the most popular laser procedure in the United States.
  • For LASIK to be considered a qualifying medical expense (and thus eligible for FSA funds), you must make an appointment with an ophthalmologist to first determine whether the procedure is medically necessary.

Qualifying Medical Expense

According to the Internal Revenue Service (IRS), laser eye surgery is a qualified medical expense for an FSA. For it to be a qualifying medical expense, you must make an appointment with an ophthalmologist to first determine whether the procedure is medically necessary.

Planning Ahead

LASIK procedures are considered elective operations. An ophthalmologist can provide you with an estimate of how much your procedure will cost. You can elect to increase your contribution the next year up to a maximum of $2,750 per year if the costs of your procedure run over what you contributed for that calendar year. By delaying the procedure, you could have fewer out-of-pocket expenses.

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

Pros and Cons of an FSA

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. Employers can elect to contribute to your FSA. FSAs are only available through employer-sponsored health care plans.

In most cases, FSA funds must be used by the end of the calendar year or they are forfeited back to your employer. There are some exceptions to this, including if your employer offers a rollover option or a grace period. The IRS gives employers the option to allow employees to rollover a certain amount of unused funds from the current plan year to their FSA for the following plan year. An employer may also offer a grace period—typically a two-month and 15 day period following the end of the plan year (although employers decide if you get a grace period and how long it lasts).

For 2020 and 2021, special rules apply to the rollover provision and the grace period. Under the Consolidated Appropriations Act, employers can allow all unused funds to be carried over from 2020 to 2021 and from 2021 to 2022. Or, employers can extend the grace period to 12 months, rather than 2-and-a-half months. The effect of either decision is the same: all unused funds can be carried over and used throughout the entire year.