Final answer:
A Flexible Spending Account (FSA) can be used to cover prescriptions and copayments. It cannot be utilized for Medicare taxes or long-term care costs. The correct answers are A)prescriptions and C) copayments
Step-by-step explanation:
An Flexible Spending Account (FSA) can be used to pay for various out-of-pocket healthcare costs. According to IRS guidelines, a FSA is designed to cover eligible medical expenses that are not reimbursed by another source like insurance. The following answers correspond to the usage of an FSA:
Prescriptions - FSAs can typically be used for prescription medications, correlating with the 2003 expansion of Medicare to help cover such costs for the elderly.
Copayments - Copays for doctor's visits and hospital services are eligible expenses for FSAs.
Medicare taxes - FSA funds cannot be used to pay for Medicare taxes, as these are considered payroll deductions.
Long-term care costs - Generally, long-term care costs are not eligible for FSA reimbursement.
Therefore, FSAs can be used to pay for prescriptions and copayments but not for Medicare taxes or long-term care costs.