Life License Qualification Program (LLQP) Practice Exam

What type of expenses can be paid for using a medical flexible spending account?

1. Household expenditures

2. Cosmetic procedures

3. Prescription drugs

4. Vitamins and supplements

The correct answer is: Prescription drugs

A medical flexible spending account (FSA) is specifically designed to cover eligible healthcare expenses. This includes a variety of qualified medical costs that are incurred by the account holder or their dependents. Prescription drugs are a key expense that generally qualifies for reimbursement through an FSA, as they are essential for the treatment of medical conditions and are prescribed by licensed healthcare providers. Eligible expenses under a medical FSA typically extend to co-pays for doctor visits, dental and vision care costs, and certain over-the-counter medications when prescribed, alongside prescription drugs. Understanding the specific nature of these expenses emphasizes the importance of keeping receipts and documentation for qualifying purchases. On the other hand, expenses like household expenditures, cosmetic procedures that aren't medically necessary, and vitamins and supplements typically do not qualify under IRS guidelines for FSA reimbursement, which emphasizes the focus on necessary medical expenses rather than general health or wellness items.