If you continue to have cash in a versatile spending account, the clock is ticking.
Last 12 months throughout open enrollment, you might have elected to fund an FSA with pre-tax {dollars} you could spend on eligible medical bills, resembling physician’s go to copays, dental process charges or prescribed drugs.
Generally talking, you might have till the tip of the 12 months to spend the cash in your account otherwise you lose it. That means should you had fewer medical bills this 12 months than you thought, it’s possible you’ll be sitting on a pile of money that can disappear should you do not determine a solution to spend it.
Don’t panic. If you are strategic, you continue to have time to spend your FSA money in a timely manner and on issues that you will be glad to purchase.
But keep away from these three frequent errors that are inclined to journey folks up close to the deadline.
1. You assume you are operating out of time to spend your FSA cash
The Dec. 31st deadline could also be quick approaching, however relying in your firm’s particular coverage, you might have extra time than you assume.
Ask your HR division or the FSA administrator at your organization to get clarification on when your FSA funds expire, says Rachel Rouleau, chief compliance officer at FSAStore.com.
“The most typical plan 12 months is January to December,” says Rouleau. “But it may finish it on any month all year long, relying on when your employer has made that plan 12 months on your advantages. So you wish to know when [your deadline] is.”
Ask about extensions, too. “You may even have a two-and-a-half month grace interval on the finish of your plan 12 months to proceed to spend down funds,” Rouleau says. That means if in case you have a Dec. 31 deadline, you could possibly use 2024 funds on bills via March 15.
And even should you do have a tough and quick deadline, you could possibly carry some or all your remaining FSA stability over into next year’s plan.
However, your employer can both supply a two-and-a-half month grace interval or a carryover possibility, but not both, in response to the IRS, so make sure to ask.
2. You have not spent your FSA {dollars} on well being tech but
With advances in wearable expertise that may assist you to deal with or stop sickness, the variety of objects you possibly can spend your FSA cash on is increasing. Online shops resembling FSAStore.com and Amazon’s FSA Store characteristic gadgets resembling blood stress displays and digital scales that fall below the IRS’s definition of a health-care expense.
But be sure that to double examine along with your FSA administrator that sure objects are eligible earlier than buying. Your administrator could require a letter of medical necessity out of your physician that proves you want the merchandise to deal with a selected well being situation, Rouleau says.
“The huge unlock is the letter of medical necessity,” says Nery Solano, head of client advertising at TrueMed, an internet market specializing in FSA-eligible objects that want medical signoff earlier than buy.
The web site connects customers with licensed practitioners in TrueMed’s community who can write letters of medical necessity for objects resembling train bikes, dietary supplements and chilly plunge swimming pools. You may request a letter of medical necessity out of your main care doctor, if in case you have one.
3. You do not use your FSA for over-the-counter drugs and menstrual merchandise
In years previous, deadline FSA spending meant both reserving last-minute appointments with specialists, splurging on prescription sun shades or scrounging across the drugstore for medical merchandise resembling ace bandages and knee braces.
Thanks to the 2020 CARES Act, you need to use your FSA funds to purchase virtually any over-the-counter medication, in addition to menstrual merchandise resembling tampons, pads and liners.
But keep in mind, you might have to doc what you have purchased with the intention to be reimbursed by your FSA plan administrator. Rouleau strongly recommends retaining your receipts for all purchases, even when your plan doesn’t require documentation up entrance.
“You ought to at all times maintain your receipts, it doesn’t matter what,” she says.
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