Investing in high-quality skincare products can come with a higher price tag. It’s worth it to keep your skin healthy and beautiful, but savvy skincare afficionados know that there are ways to save on skincare products you really need, using tax-free money. It may sound too good to be true, but those who have Flexible Spending Account (FSA) and Health Savings Account (HSA) funds through their insurance may be able to utilize this money on necessary skincare items.

Dermatology treatments and skincare products are often the last things people consider when spending their FSA and HSA funds, but there are many products you can invest in to maximize available spending account dollars. In this blog, we’ll discuss exactly what FSA and HSA funds are, how they work, and what dermatologist-recommended skincare products can be purchased with these accounts.

What Are FSA/HSA Funds?

Before we discuss the products available at DermSkincare that are eligible for purchase using FSA and HSA funds, it’s important to understand the differences between these medical spending accounts and how they work.

FSA: Flexible Spending Account

An FSA is an employer-sponsored account that allows employees to contribute pre-tax dollars for use on qualified out-of-pocket healthcare expenses. FSA accounts can be used on numerous medical-related expenses, including copays, prescriptions, and some over-the-counter items, like approved FSA skincare products. The most important difference compared with HSAs is that FSAs are "use it or lose it" funds. The money invested in FSA accounts must be spent within the plan year. Some plans offer a short grace period or allow a limited rollover of a certain amount from one plan year to the next.

HSA: Health Savings Account

HSAs are available to individuals enrolled in a high-deductible health plan (HDHP). These accounts also allow tax-free contributions like FSA, but there is an added bonus. Unused HSA funds roll over year to year, and HSA funds over a certain amount (typically $2,000) can even be invested. Unlike FSAs, HSAs are yours to keep even if you change jobs or health plans. Additionally, items like acne treatments and sunscreen are HSA eligible with fewer limitations compared to FSA accounts.

Shared Purpose

Both FSAs and HSAs reduce taxable income and provide savings on healthcare-related expenses. Funds from either account can be used for "medically necessary" treatments and products, including FSA and HSA eligible skincare products that address specific health concerns.

What Skincare Products Are FSA/HSA Eligible?

While most people know they can utilize FSA/HSA funds on doctor’s office visits and prescription medications, many don’t know that over-the-counter (OTC) products also qualify as expenses for FSA/HSA accounts if they are used to address or prevent specific conditions or they are prescribed by a medical professional. That includes over-the-counter and prescription skincare products.

What’s Covered?

The Internal Revenue Service (IRS) sets regulations on what can be purchased using FSA and HSA funds. Some insurers or specific FSA and HSA account providers also have individual regulations. In general, IRS regulations on FSA and HSA funds stipulate products must:

• • Serve a medical or therapeutic purpose.
• • Treat or prevent a diagnosed condition (like acne or eczema).
• • Provide preventive care (like preventing sun damage with sunscreen).

What’s Not Covered?

Products used for strictly cosmetic or elective purposes are typically excluded by the IRS. For skin health, this includes:

• • Foundations, powders, and creams that contain SPF but are formulated primarily as cosmetics.
• • Non-medicated cleansers and moisturizers.
• • Anti-aging serums or aesthetic treatments.
• • Most basic, over-the-counter skincare items unless prescribed.

Eligible Categories & Top Recommended Products

To assist you in finding skincare products that meet FSA and HSA guidelines, we’ve compiled a list of top dermatologist-recommended skincare products that typically qualify for purchase with these funds. When in doubt, you can always reach out to your FSA/HSA account services to verify eligibility before purchase.

Sunscreen (SPF 15+ Broad Spectrum)

Why It’s Eligible: Daily sun protection is considered essential preventive healthcare. You can use HSA for sunscreen with SPF 15 or higher that offers broad-spectrum UVA/UVB protection. In most cases, sunscreens are also FSA eligible, but there may be more limitations. For some, a dermatologist needs to prescribe a specific sunscreen to ensure it is covered by HSA/FSA funds.

Top Dermatologist Picks:

• • ZO Skin Health Smart Tone Broad Spectrum SPF 50 – a tinted, lightweight sunscreen that adapts to any skin tone while offering powerful UVA/UVB protection.
• • EltaMD UV Active Broad Spectrum SPF 50 – a water-resistant, zinc-based formula sunblock that is great for active lifestyles and sensitive skin.
• • SkinCeuticals Physical UV Defense SPF 30 – offers non-comedogenic, broad-spectrum protection perfect for post-procedure, acne-prone, or sensitive skin.
• • ISDIN Eryfotona Actinica – a photolyase-enriched sunscreen designed to repair sun damage while preventing the adverse effects of UVA/UVB exposure in the future.

 Acne Treatments

Why It’s Eligible: Acne is a diagnosed medical condition. Medicated cleansers and treatments are acne products FSA/HSA accounts cover. Consult a dermatologist about what specific skincare products are covered or look for medicated acne cleansers and treatments that contain benzoyl peroxide, salicylic acid, adapalene, or retinoids as these are most likely to be eligible for purchase with FSA/HSA funds.

Top Dermatologist Picks:

• • MD Skin Essentials Cleanse It – a gentle cleanser designed to clear clogged pores and reduce oiliness.
• • MD Skin Essentials Acne Bundle – a targeted skincare routine that includes both treatment and maintenance products for acne-prone skin.
• • Skinbetter Science AlphaRet Clearing Serum – combines retinoid technology with salicylic acid for powerful acne-fighting effects. This is a perfect product to clear up breakouts.
• • SkinCeuticals Retinol 0.5 – a prescription-strength retinol that clears blemishes and improves skin texture.
• • Skinbetter AlphaRet Exfoliating Peel Pads – these exfoliating pads combine glycolic, lactic, and salicylic acid to remove dead skin, unclog pores, and brighten skin tone.

Scar and Wound Care

Why It’s Eligible: Injuries, even the most minor, may benefit from medical-grade products to heal properly and minimize permanent scarring. Silicone-based healing ointments are generally FSA/HSA approved skincare products.

Top Dermatologist Picks:

• • Silagen 1x6 Silicone Strips – proven to reduce the appearance of hypertrophic and keloid scarring.
• • Silagen Rapid Recovery Kit – a complete post-procedure skincare system that speeds healing, reduces inflammation, and decreases risk for scar formation.
• • Silagen 100% Pure Silicone Gel SPF 30 – combines sun protection with silicone therapy for enhanced scar prevention and diminished appearance of existing scars.

Anti-Itch & Rash Relief

Why It’s Eligible: Sensitive or itchy skin, rashes from eczema, hives, and itching in response to allergens or irritants can be uncomfortable and affect quality of life. Products containing hydrocortisone or other medicated actives alleviate itch and are often FSA/HSA eligible.

Top Dermatologist Picks:

• • Dermeleve Cream – provides rapid relief for itchy, irritated skin, including eczema flareups, offering a soothing, non-steroidal formula.
• • Dermeleve Anti-Itch Scalp Serum – calms inflammation and itching on the scalp without steroids.

What’s NOT Eligible?

While there are numerous FSA/HSA-qualified skincare products available, many dermatologic treatments and skincare products are ineligible. When in doubt, check with your FSA/HSA administrator to confirm whether a product is eligible, and always keep your receipts.

Ineligible Items Include:

• • Cosmetic products that contain SPF but are marketed as makeup.
• • Non-medicated cleansers or basic moisturizers.
• • General-use anti-aging products or serums.
• • Over-the-counter items without a prescription (depending on your FSA provider).
• • Body washes, shampoos, and bath products not used to address a diagnosed skin condition.

Why This Matters

Timing is everything when it comes to dermatologist-recommended skincare with FSA funds. In most FSA plans, unused dollars are forfeited at the end of the plan year, meaning you lose money you’ve already set aside. While HSA funds can be rolled over, it never hurts to utilize these funds on covered skincare expenses. Dermatologist-recommended skincare isn’t just a luxury. It can be an investment in your long-term health and wellbeing. By using tax-free funds to purchase qualified products, you’re maximizing health savings while building a better skincare routine.

Ready to Invest in Healthy Skin?

Looking to stock up on skincare before the year ends? Your FSA clock is ticking. Don’t let your tax-free dollars go to waste. Take charge of your skincare with professional-grade products from DermSkincare. Always check the eligibility of your chosen items and talk to your dermatologist about the best options for your skin condition. If you’re looking for more skincare tips and product recommendations, come back to read our blog regularly.