Flexible Spending Account (FSA) and Sleep Apnea Expenses

If you have an FSA, you must use your funds before the end of the year – or before a grace period ends. Check with your employer to learn when the grace period expires. You might have several months to use those FSA funds.

It’s the old adage, “use it or lose it.”

In this article, we discuss FSA, what it is, and how it applies to people with sleep apnea.

You can pay for some sleep apnea supplies with your FSA funds – including upgrading to a new CPAP device, or buying new masks, tubing and filters.

Also, your sleep apnea expenses can help meet your deductible early in the year – so your insurance starts paying sooner.

What is a Flexible Savings Account (FSA)?

If you have health insurance through a job, you can use an FSA to pay for health care/medical costs -- deductibles, copayments, coinsurance, medical equipment, and some drugs. This helps to lower your taxes.

Many of your sleep apnea medical expenses will apply to your FSA. 

Your prescribed medical equipment (like CPAP) and accessories like masks, tubing, a humidifier, filters will qualify for an FSA. 

Special pillows and PAP cleaning supplies such as wipes  wipes also qualify  for FSA. 

How Flexible Spending Accounts work

A Flexible Spending Account (FSA) is a special account you put money into during the year, out of your paycheck. You must use those funds to pay for certain out-of-pocket health care costs.

You don’t pay taxes on this money – so you’ll save taxes on that money. 

Your employer might make a contribution to your FSA, but they aren’t required to.

With an FSA, you submit a claim to the FSA (through your employer) with proof of the medical expense – and include a statement that the expense hasn't been covered by your health insurance plan. 

When approved, you’ll get reimbursed for your costs. 

Check with your employer about their process for using your specific FSA.

Facts about Flexible Spending Accounts (FSA)

  • Limited to $3,050 per year per employer. If you’re married, your spouse can put up to $3,050 in an FSA with their employer too.
  • Use funds to pay for certain medical and dental expenses for you, your spouse if you’re married, and your dependents.
  • Spend FSA funds to pay deductibles and copayments, but not for insurance premiums.
  • Spend FSA funds on prescription medications, as well as over-the-counter medicines with a doctor's prescription. Reimbursements for insulin are allowed without a prescription.
  • Use FSA funds to cover costs of medical equipment like CPAP and mandibular devices for sleep apnea, as well as masks, tubes, humidifier, and other necessary equipment needed for your sleep apnea therapy. 

The Internal Revenue Service can provide a list of generally permitted medical and dental expenses.

FSA limits, grace periods, and carry-overs

You generally must use the money in an FSA within the plan year. But your employer may offer one of 2 options:

  • A "grace period" of up to 2 ½ extra months to use the money in your FSA.
  • Carry over up to $610 per year to use in the following year.

Your employer might not offer these options. If they do, you will have one option – but not both options. Check with your employer about their policy.

FSA and your deductible

You must meet your deductible before the insurance company starts paying a portion of your medical bills. Then you’ll pay your share … in the form of co-insurance or co-payment…. AFTER you have met your deductible.

Any medical supplies can go toward your deductible… like masks, tubes, and filters… as they are within your CPAP prescription. Non-prescription items like CPAP pillows and wipes don’t apply to your deductible.

Plan ahead

At the end of the year or grace period, you lose any money left over in your FSA. Don’t put more money in your FSA than you think you'll spend within a year on things like copayments, coinsurance, medications, and other allowed health care costs.

So get a head start… with a little online shopping… to meet your CPAP needs