Can you use a dependent care FSA for eye drops?

No. A dependent care FSA reimburses the cost of caring for a qualifying person, such as a young child, so that you can work or look for work. IRS Publication 503 describes those expenses, and medicine isn’t one of them. Over-the-counter eye drops belong in a health FSA or an HSA, which IRS Publication 969 says can pay for OTC medicine whether or not it’s prescribed.

Two FSAs with similar names

Many employers offer more than one flexible spending arrangement during open enrollment, and the names blur together. They’re separate accounts with separate rules, funded separately from your paycheck:

• A health FSA pays for medical care: copays, prescriptions, glasses and, since 2020, over-the-counter medicine.
• A dependent care FSA, sometimes called a DCFSA or dependent care assistance program, pays for the care of a child or another qualifying person while you work.
• A limited-purpose FSA is a narrower health FSA, often paired with an HSA, that usually covers vision and dental costs. What it pays for depends on how the employer wrote the plan.

Money in one can’t simply be moved to another. If you’re looking at a balance and wondering whether a bottle of eye drops qualifies, the first step is figuring out which account the money is actually in.

What a dependent care FSA pays for

IRS Publication 503 covers child and dependent care expenses. It explains that the expenses must be for the care of a qualifying person and must allow you, and your spouse if you file jointly, to work or look for work. It also says that care expenses count only when their main purpose is the person’s well-being and protection.

In practice that means things like:

• Daycare or preschool for a child under 13.
• Before- and after-school programs.
• A babysitter or nanny who watches a child during work hours.
• Day camp during summer break.
• Adult day care for a spouse or dependent who can’t care for themselves.

A bottle of eye drops for you, your child or anyone else in the household doesn’t fit that description. It’s medicine, and the tax code counts medicine as medical care, which is the territory of a health account.

Which account covers eye drops

The CARES Act, signed March 27, 2020, made over-the-counter medicine a qualified medical expense without a prescription for amounts paid after 2019. IRS Publication 969 describes the rule for health savings accounts and health FSAs. Lubricating eye drops sold with a Drug Facts label, like Quell, are over-the-counter medicine. Quell’s label lists its Uses as: For use as a protectant against further irritation or to relieve dryness of the eye.

So the accounts that generally can pay for eye drops are a health FSA, an HSA, and possibly a limited-purpose FSA if the employer’s plan includes OTC medicine. Our guide to why OTC eye drops count for HSA and FSA explains the change in more depth, and Can I use HSA or FSA funds for eye drops? covers the basics of each.

If you already paid from the dependent care account

Mistakes happen, especially when two benefit cards look alike or when a reimbursement portal lists both accounts on one screen. If you submitted an eye drop receipt to your dependent care FSA, or used the wrong card:

• Contact your FSA administrator before the claim is paid, if you can, and ask to withdraw it.
• If it was already paid, ask the administrator how it wants the money returned or offset.
• Resubmit the same receipt to your health FSA, or reimburse yourself from your HSA, following that account’s steps.
• Keep copies of every message and receipt in case your employer or the IRS asks later.

Your administrator’s instructions are the ones that count here, since each employer’s plan documents set the procedure. Our guide on how to file an FSA claim for eye drops shows what a typical health FSA claim looks like.

When you only have a dependent care FSA

Some people elect a dependent care FSA for daycare and skip the health FSA. If that’s you, eye drops are simply an out-of-pocket purchase this year. A few options for next time:

• At open enrollment, check whether your employer offers a health FSA and how much you’d realistically spend on copays, glasses and OTC medicine.
• If you’re enrolled in a high-deductible health plan, ask HR whether you’re eligible to open an HSA.
• Estimate eye drop spending from how often you reorder. At the labeled directions, Apply 1 drop 3 times per day in each eye, a .33 fl oz (10 mL) bottle doesn’t stretch far.

None of this is personal tax advice. Your plan administrator or a tax professional can tell you what your specific accounts allow.

Ordering Quell with a health account

Quell is sold on quelldrop.com with guest checkout, no subscription and no coupons. Whether a health FSA or HSA card is accepted at payment depends on the card issuer and plan, so we can’t say in advance that yours will go through. If it doesn’t, the order confirmation email works as an itemized receipt for a reimbursement claim, and past orders can be looked up on the orders page. Shipping is $10.00 per order, and 3 or more bottles ship free.

Before using any eye drop, read the label caution: Caution should be used in those with egg or bird allergies — For use in the eyes only. The full Drug Facts panel is on our Drug Facts page.