What FSA & HSA Funds CANNOT Be Used For (2026)
Every year, employees lose money or face IRS audits by spending FSA funds on ineligible items. Know the rules before you swipe your card.
1. Categories That Are NOT Covered
The IRS defines eligible expenses as those that treat, diagnose, mitigate, or prevent a specific medical condition. Anything that promotes general health or is cosmetic in nature is excluded. Here are the six most common ineligible categories:
Cosmetics & Beauty
- ✗ Teeth whitening strips or gels
- ✗ Anti-aging creams (purely cosmetic)
- ✗ Makeup and cosmetics
- ✗ Hair loss treatments (non-medical)
- ✗ Botox for cosmetic purposes
- ✗ Teeth veneers
General Health & Fitness
- ✗ Gym memberships
- ✗ Exercise equipment (general use)
- ✗ Vitamins & supplements (general wellness)
- ✗ Protein powders or weight loss shakes
- ✗ Fitness trackers (without LMN)
- ✗ Health club dues
Personal Hygiene
- ✗ Toothbrushes (electric or manual)
- ✗ Toothpaste (standard)
- ✗ Shampoo and conditioner
- ✗ Soap and body wash
- ✗ Deodorant
- ✗ Moisturizers (non-medicated)
Baby & Family (Surprises)
- ✗ Standard diapers & baby wipes
- ✗ Baby formula
- ✗ Standard video-only baby monitors
- ✗ Maternity clothes
- ✗ Childcare costs (use DCFSA instead)
- ✗ Baby food
Food & Nutrition
- ✗ Groceries and food (even "healthy" food)
- ✗ Meal delivery services
- ✗ Dietary supplements (general use)
- ✗ Weight loss programs (without diagnosis)
- ✗ Special diet foods
- ✗ Herbal supplements
Insurance & Fees
- ✗ Health insurance premiums (HCFSA)
- ✗ Life insurance premiums
- ✗ Gym insurance or wellness plans
- ✗ Elective cosmetic surgery
- ✗ Funeral or burial expenses
- ✗ Non-prescription sunglasses
2. The 5 Most Expensive FSA Mistakes
These are the errors that cost employees the most money — either through forfeited funds, IRS penalties, or denied claims.
Buying "Wellness" Items Without Checking Eligibility
Just because something is sold at a pharmacy does not make it FSA eligible. Vitamins, protein bars, and general wellness products are almost always ineligible unless they treat a specific diagnosed condition. Always verify before you swipe.
Using HCFSA Funds for Childcare Costs
Daycare, after-school programs, and summer camps must be paid from a Dependent Care FSA (DCFSA) — not your Healthcare FSA. Using the wrong account can trigger repayment demands and penalties. See our DCFSA Guide for the full rules.
Assuming All Supplements Are Eligible
General vitamins (Vitamin C, D, multivitamins) are NOT eligible. A supplement recommended by a doctor to treat a specific deficiency may qualify with documentation, but only if it treats a diagnosed medical condition — not for general wellness.
Not Keeping Receipts for HSA Purchases
The IRS requires you to keep HSA receipts permanently. If audited years later, you must prove every withdrawal was for an eligible expense. Without receipts, ineligible withdrawals are taxed plus a 20% penalty.
Panic-Buying Ineligible Items Before the Deadline
Rather than losing money at year-end, many employees panic-buy ineligible items. The smarter move is to stock up on verified eligible items — sunscreen, first aid, contacts, and OTC medicines — before the deadline. See our Verified FSA Shop.
3. Eligible vs. Ineligible — Shop the Alternative
For every item you cannot buy, there is a smarter eligible alternative. Click any product below to shop it directly on Amazon using your FSA/HSA card.
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