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Don’t Leave FSA Money on the Table


Flexible Spending Accounts (FSAs) are a great benefit many employers still offer to help you save money on your healthcare costs. During your company’s open enrollment period, which may coincide with the end of the year, if you have the opportunity to select an FSA program, jump on it? FSAs are an excellent way to put aside tax-free dollars to cover many of your out-of-pocket medical, dental and vision expenses.  Here’s how they work.

 

  • You voluntarily make pre-tax contributions up to the allowable limit. This year and in 2016, that will be $2,550. It’s taken out of your paycheck in incremental amounts.
  • You save the receipt from out-of-pocket expenses for items that are eligible under FSA and are reimbursed for them at the end of the year, up to the maximum $2,550 contribution.
  • Your company’s FSA plan administrator will give you a list of what is eligible. It includes a numbers of over-the-counter items like allergy medications, antacids and vitamin supplements, but you have to have a doctor write a prescription for them to be reimbursable. Your doctor knows all about this and will cooperate. Just make a list of the stuff you and your family use regularly so your doctor can write single prescription. Some items, like blood pressure monitors, hearing aid batteries and thermometers can be reimbursed without a prescription.
  • FSA contributions do not earn interest, you can’t withdraw funds from your FSA account for non-allowable expenses, and if you’re terminated or quit your job, the funds don’t travel with you.
  • In most cases, FSA contributions MUST be used before the end of each year. They do not roll-over. If you don’t use the money, you’ll lose it. This brings us to the point of this post: DO NOT LEAVE FSA MONEY ON THE TABLE. Add you your receipts. If they’re under what you’ve contributed to your plan, call your doctor’s office and get prescriptions for things you know you’ll be using in the coming year. Then go on a shopping spree before the end of the year. Or call your dentist or eye doctor and make an appointment.
  • There are two exceptions to the use-it-or-lose-it provision. Check to see if your FSA plan offers either: a grace period of up to 2.5 extra months to spend this year’s FSA funds; or a provision that allows you to carry over up to $500 per year into the next year.

 

Don’t have any healthcare coverage or want to compare ACA-compliant health plans before the end of this year’s Open Enrollment period? You can do that here.

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