First, allow me to say thanks for reading this.

At work we have an employer provided cafeteria plan. We can contribute up to 6% of our annual salary as well. I was one of the unlucky people and contributed to this fund but was healthy all year long. Being a single, young guy I am at wits end on how to spend the money.

I looked into the rules and I'm not sure what is legal. I can't seem to spend the money unless I have a doctor's approval for anything. I can't buy *anything* on the FSA approval list, and apparently our health care is too good for the HSA guidelines.

I was handed this three page document about allowable spending, but it doesn't match the government IRS established guidelines. Even the allowable spending must be accompanied by a doctors note. I don't want to bother my doctor when I need some over the counter medicine to save 12 bucks.

Is it legal for an employer to limit what you can use your money on? If so, then why don't employers make it impossible to use the money, they end up getting it in the end to spend on next year anyways.

From the IRS website:

Qualified medical expenses. Qualified medical expenses are those specified in the plan that would generally qualify for the medical and dental expenses deduction. These are explained in Publication 502, Medical and Dental Expenses. However, even though non-prescription medicines (other than insulin) do not qualify for the medical and dental expenses deduction, they do qualify as expenses for FSA purposes.

You cannot receive distributions from your FSA for the following expenses.
Amounts paid for health insurance premiums.

Amounts paid for long-term care coverage or expenses.

Amounts that are covered under another health plan.


I'd contact your plan administrator (not your employer) for a list of what they say are qualified medical expenses.

Rangeman,

Thanks for the reply. Here's the catch. The plan's administrator is the employer. The plan allows for anything he chooses I guess. He's subsequently removed one or more of the items that are specified by the IRS as "alllowable". My question is, if the employer can be the plan administrator, and he can remove anything he or she wants off off that list, then why the heck would he allow anything?

Basically I was wondering if removing things off of that list was legal. I guess there's some frustration in the fact that I have contributed to the plan and now I have to bother my doctor anytime I need anything.

Edit:
Once again, thank you for the reply and looking into things for me.

I can not find anything what so ever that discusses of a plan can change the items it allows for reimbursement. Everything I have available points to the IRS site and this booklet for determination if an expense is allowed:

http://www.irs.gov/pub/irs-pdf/p502.pdf

I guess at this point I would call the IRS (Good luck, at least it isn't tax season) to see if their plan is legit. Do you have the opportunity to get a Summary Plan Description from your employer?

I guess at this point I would call the IRS (Good luck, at least it isn't tax season) to see if their plan is legit. Do you have the opportunity to get a Summary Plan Description from your employer?

heh, thanks. I'll have to do that. To answer your question though, yes I can get a plan description and I have used some of my money in the plan but there's still an immense amount of money 800 bucks that are unused and I fear are in jeopardy of disappearing.

The document covers most things but like you in my research I found nothing telling me if companies are allowed to remove things from the list if they manage the FSA themselves.