Where Can I Purchase FSA Eligible Items?

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Your FSA is a great way to save money on eligible medical expenses. But where can you use these funds? We detail what stores you can purchase FSA eligible expenses.

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What you need to know about merchants and substantiation

Your flexible spending account (FSA) is a powerful tool to help you save on healthcare costs. Each dollar you set aside in your FSA is pre-tax, allowing you to save up to 35%¹ when you use your FSA funds for eligible products and services. Because these FSA dollars are pre-tax, this means you don’t pay taxes on those funds. But there are restrictions—set by the IRS—on where and how you can spend the money in your FSA. The more you know about these limitations, the easier it is to use your FSA.

The IRS Requires Substantiation on FSA Purchases

The first thing to know? The IRS requires verification that the items you buy with your FSA are eligible medical expenses

The good news? Some eligible items are automatically substantiated through your FSA provider. This happens at certain merchants who have their inventory control system set up to work with IRS regulations. This means that for you the customer, the qualified purchase is automatically approved. This system is known as an Inventory Information Approval System (IIAS).

For example, if you use your FSA to cover over-the-counter medication for pain relief at a pharmacy, you may not have to substantiate your purchase. See the chart below for more information.

Different Types of Merchants

Use this handy chart to get familiar with different types of merchants and the substantiation requirements. Keep in mind that this chart covers services eligible for a Medical FSA.

If you have a Limited Purpose FSA, only dental and vision services qualify. Use Lively’s "What's Eligible" page to see what eligible expenses you can make by FSA plan type.


  • Not every franchise of these retailers is IIAS-certified. If not, you’ll need to pay out-of-pocket and request reimbursement.

Understanding the Different Merchant Types

Want to look up a merchant to see their status? Use this site to search for both IIAS-certified and 90% merchants in your area.

IIAS-Certified Merchants

IIAS-certified merchants have modified their inventory management systems to automatically identify FSA-eligible products. You won't have to substantiate your purchases with your FSA debit card at these merchants.

90% Stores

These stores are stores in which 90% of their merchandise is FSA-eligible. When making a purchase with your FSA debit card at these types of stores, you will need to provide substantiation. Uploading a receipt or Explanation of Benefits (EOB) will help to verify that the purchase is FSA-eligible.

Health Care Providers

Generally speaking, you can use your debit card at your health care provider's office to help pay for your visit. You’ll need to upload an Explanation of Benefits (EOB) and receipt so the expense can be substantiated.

Non-certified and Local Merchants

When making qualified purchases at non-IIAS certified merchants, you will need to pay out-of-pocket. You can then submit your receipts for reimbursement from your FSA.

What's an Explanation of Benefits (EOB)?

An Explanation of Benefits (EOB) is a statement from your health, dental, or vision insurance plan. It describes the services received and what costs the plan will cover and the amount you’ll pay. Your provider creates an EOB when they submit a claim for the services you received. An EOB is not a bill but is an ideal document for substantiating FSA claims.

NOTE: Make sure your provider’s bill matches the EOB before you pay.

Follow the Rule of 5 for Substantiation

When submitting documents and receipts for substantiation, be sure to follow the Rule of Five. If your documents cover these five elements, approving your payments will be simple.

  1. Patient or dependent name
  2. Provider or merchant name
  3. Date of service
  4. Type of service or product
  5. Expense amount

Footnote: ¹) Your savings may vary. The 35% example includes 24% federal tax savings, 3.35% state tax savings, and 7.65% payroll tax savings.

Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.

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