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If you have a Flexible Savings Account (FSA), the end of the year means it may be time to use it or lose it, if you have money left in your account. I had a FSA account for several years, before switching over to a HSA account with a high deductible medical plan. (The HSA is similar to the FSA as far as what you can use it for, but it does have some additional benefits- if you want to learn more about it, you can read my post on my HSA account.)
By law, companies are permitted (but not required) to let their employees use the previous year’s FSA account balance until March 15th of the next year, but many do not. If you are not sure what your employer’s policy is, find out now so you don’t lose out. If you do need to use it by the end of the year, make sure you do so so you don’t lose money!
Items or services you can use your FSA account for to use up the remaining balance:
- Medical expenses, including co-payments
- Prescriptions
- Dental expenses
- Vision expenses, including saline solution, contact lenses, glasses, or even prescription sunglasses.
- Over the counter medications (OTC)
Check here for additional FSA eligible items
Using up Your FSA This Year
If you need services, like an eye exam, dental cleaning, etc, you should try to schedule it before the end of the year. I have also spent remaining FSA money at the end of December by stocking up on saline solution and over the counter medicines for the coming year. Assess what types of medicines and other eligible items you use regularly, and stock up on them if you still have a FSA balance you need to use up.
Planning your FSA Deductions for Next Year
The problem with the FSA is that it is “use it or lose it”, so you usually have to be conservative with your projections and FSA withholding for the upcoming year. Look at the previous year’s medical expenses, and whether or not you used up your FSA early in the year, for example. Do you have any additional expenses coming up next year, like expecting a child or getting Lasik surgery to correct your vision? Add the additional amount to your FSA as well.
Similar Posts:
- The Health Savings Account (HSA) and Can I Do Better Than a Health Insurance Company?
- 31 Ways to Save on Health Care and Medical Costs
- How Did My Health Savings Account (HSA) Perform Last Year?
- Negotiating a Deal and Tips on Becoming a Better Negotiator
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Just one correction to your post; for employers that offer a “grace period” that allows you to spend money in the new year, you only have until March 15 to actually incur your expenses. Generally you will have until March 31 to submit the expenses, but you should check with your employer or the administrator to be sure.
Thanks, Rob. I corrected it in the post- I was going off memory- I should have looked it up!