How to Make the Most Out of Your FSA at Year-End | California Corporate Benefits
As 2017 comes to a close, it’s time to act on the money sitting in your Flexible Spending/Savings Account (FSA). Unlike a Health Savings Account or HSA, pre-taxed funds contributed to an FSA are lost at the end of the year if an employee doesn’t use them, and an employer doesn’t adopt a carryover policy.
Losing money is upsetting, but it’s not necessary! Here are 4 ways you can make the most out of your FSA by year-end.
1. Book Those Appointments
One of the first things you should do is get those remaining appointments booked for the year. Medical/dental/vision facilities can book out a couple of months in advance, so it’s important to request an appointment now to use up those funds. Booking these appointments before year end serves a triple purpose.
- It enables you to use up your remaining FSA funds
- A dental or vision exam appointment can give you a good idea of what your dental and eyewear expenses are likely to be next year allowing you to more accurately plan next year’s FSA contribution.
- A dental cleaning is essential for maintaining good health. Much research shows that regular dental cleaning prevents medical diseases as well as dental disease. Your eye exam can also be a life saver. Vision doctors can detect many diseases, such as diabetes, long before symptoms show thus helping assure you a longer life in better health. Don’t let a year go by without your dental cleanings or eye exam.
2. Look for FSA-Approved Everyday Health Care Products
Many drugstores will often advertise FSA-approved products in their pharmacy area, promoted on a flyer, or on their website. These products are usually tagged as “FSA approved”. Many of these products include items that you might not think of – like blood pressure and diabetic monitors – to everyday healthcare products like over-the-counter meds, bandages, contact lens solution, sunscreen, and many other personal care items. If you don’t have time, take a trip to the store online. At fsamarket you will find a wide selection of products that are FSA eligible to conveniently use up your FSA balance. First time users can use the coupon code CCB5OFF at checkout to receive 5% off your entire order.
Know What’s Considered FSA-Eligible
Over the last several years, the IRS has loosened the guidelines on what is considered eligible under a FSA. There are many items that are considered FSA-eligible as long as a prescription or a doctor’s note is provided or kept on file. Here are a few to consider:
- Prescriptions. If you take maintenance prescriptions (examples: blood pressure, cholesterol or birth control), restock your prescriptions before year-end.
- Acupuncture. Those who suffer from chronic neck or back pain, infertility, depression/anxiety, migraines or any other chronic illness or condition, Eastern medicine may be the way to go. Not only are treatments relatively inexpensive, but this 3,000 year old practice is recognized by the U.S. National Institute of Health and is an eligible FSA expense.
- Dental Procedures. Dental treatment can be expensive—think orthodontia and implants. While many employers may offer coverage, it’s a given there will be out-of-pocket costs you’ll incur. These expenses, i.e. deductibles, coinsurance and copays, are eligible for FSA reimbursement if they are incurred by your FSA year-end. If you have significant funds in your FSA maybe it’s time to begin braces for yourself or your children.
- Vision Procedures. And, eye care plans won’t cover the cost of LASIK, but your FSA will. So, if you’ve wanted to correct your vision without the aid of glasses or contacts, your FSA funds is the way to go. You may also be wishing you had a pair of prescription sunglasses, extra glasses for reading or computer work or need to stock up on your contact lenses. If so, use your FSA.
- Health-boosting Supplements. While you cannot just walk into any health shop and pick up performance-enhancing powder or supplements and pay with your FSA card, your doctor may approve certain supplements and alternative options if they deem it to benefit your health and well-being. A signed doctor’s note will make these an FSA-eligible expense.
- Smoking-cessation and Weight-Loss Programs. If your doctor approves you for one of these programs with a doctor’s note deeming it’s medically necessary to maintain your health, certain program costs can be reimbursed under an FSA.
3. Talk to Your HR Department
When the IRS loosened guidelines a few years ago, they also made it possible for FSA Plan Sponsors to elect to provide to participants a carry over of up to $500 to the next year. Another possibility is an option to provide an additional grace period ( up to March 15 of the following year) to incur eligible expenses and turn in receipts to use up funds. Employers can only adopt one of these two policies though. Look at your FSA Summary Plan Description (SPD) or ask HR if either of these two provisions are included in your plan.
4. Plan for the Coming Year
Analyze the out-of-pocket expenses you incurred this year and make the necessary adjustments to allocate what you believe you’ll need for the coming year. Take advantage of the slightly higher contribution limit for 2018, which is $2,650, $50 more than in 2017. but check first to see if your plan has the updated maximum contribution amount. If your company offers a FSA that covers dependent care, familiarize yourself with those eligible expenses and research whether it would be to your advantage to contribute to as well.
Flexible Spending/Saving Accounts are a great employee benefit offering tax savings to employees. As a participant, using the strategies listed above will help you make the most out of your FSA.