Flexible Spending Account – Spend It Before You Lose It

If you don’t spend the balance of you Flexible Spending Account before the ball drops in Times Square, you forfeit the excess and burn up your savings. Don’t squander your FSA! Let’s go spend some money!

What is a Flexible Spending Account?

A flexible spending account, commonly referred to as an FSA, is an employer-provided benefit that allows you to set aside money for your health spending needs on a pre-tax basis. The money can go toward all manner of medical-related expenses, and can save you quite a bit of money when managed properly.

How do you manage the plan properly? Since you have to declare your contribution amounts before the start of each year, you should run your health spending through an FSA worksheet. That way you can predict the amount that you and your family will likely need during the upcoming year.

Predicting your health spending can be a bit of a crapshoot, so you’ll want to spend a good deal of time running through the numbers, and you should probably be a bit conservative.

Our FSA still has a balance!

My wife and I participate in the FSA plan currently offered by my employer – if they offered a Health Savings Account (HSA), I would elect to participate in that, but… They don’t, so I’ll spend my pre-tax dollars wherever I can get them!

We currently reserve $500/year for the two of us (just my wife and me). We’re coming up to the end of our 2nd year, and the $500 calculation has suited our needs pretty well, though we still have around $150 left to spend this year. Which brings me to the meat of my article… How to spend your FSA money before you lose it.

If you overestimated your expenses and have a balance left in your FSA, make sure you get out there and spend it before the end of the year! Unless, of course, you are content to forfeit the balance and negate your savings altogether!

Ways to spend your FSA balance before year’s end…

So which expenses are eligible and which ones aren’t?

General ways to spend:

  • Acupuncture – Why not start off with something interesting? I’ve always wanted to try it!
  • Doctor’s visits – Schedule a routine checkup, have a full physical performed (including blood work), or get that nagging sports injury looked at.
  • Dentist – Maybe you have a case of yuck mouth… Schedule a cleaning ASAP so you can go back a second time to get any cavities filled before years end.
  • Optometrist – Get that eye exam you’ve been putting off, get some new glasses, get your frames fixed, renew your stock of contact lenses, put it toward LASIK surgery, or even eye drops and contact solution.
  • Fill prescriptions – If you have any prescription that need to be refilled soon, do it now.
  • Immunizations – Boo… Hiss… (I’m not a big fan.)
  • Dermatologist – Uhhh, maybe you have an embarrassing rash?
  • Audiologist – Go get your ears tested. I said… GO GET YOUR EARS TESTED!
  • Therapy – Physical therapy, learning therapy, or psychiatric therapy.
  • Physical impairments – Wheelchairs, crutches, walker, custom made ortho shoes.
  • Special needs – Smoking cessation programs, transportation to/from medical appointments, etc.
  • Over-the-counter (OTC) drugs – Allergy meds, antacids, band-aids, cold and flu medicine, cough drops, fiber supplements, first aid supplies, incontinence supplies, hemorrhoid cream, laxatives, nasal spray, pain reliever, rubbing alcohol (great for use as deodorant), sinus medication, and wart remover are all covered.

Expenses that require a letter of medical necessity:

  • Health club fees
  • Visits to a chiropractor
  • Natural supplements/vitamins – Yes, that’s right… You can get birth control, hemorrhoid cream, laxatives, and wart remover, but… In order to get some vitamins, you have to show medical necessity.
  • Massage therapy – Now we’re talking!
  • Acne medication
  • Sunscreen
  • Weight loss programs – Considering the high cost of our obesity epidemic, this seems like an obvious general need… But it’s not.

Examples of ineligible expenses:

  • Cosmetic surgery
  • Insurance premiums
  • Marriage counseling
  • Prepayment of services
  • Special dietary foods
  • Personal care items
  • Teeth bleaching/whitening kits
  • Diapers

Other options

Please note that this is a general list of what is and isn’t covered. Be sure to check the details of your individual plan before spending a ton of money. Another important consideration is when you have to file your claims. While you have to spend the money by December 31st, you should have some time after the New Year to file your claims.

If you’re looking for more spending ideas, CVS has a nice list of FSA-eligible items, as does Drugstore.com. Amazon.com is another good place to spend out your FSA without leaving home, though they don’t seem to have a list of FSA-friendly items.

17 Responses to “Flexible Spending Account – Spend It Before You Lose It”

  1. Anonymous

    The most typical limits on Medical Pay are $1,000 to $5,000 per person, although a limit of
    $25,000 is obtainable with some companies, normally preferred companies.
    There are numerous options that may protect
    you past the minimum that is certainly legally required. Weigh all
    factors together to find a company that can provide
    a balance of strong reputation, quality coverage,
    and a price you can afford.

  2. Anonymous

    hi!,I like your writing very so much! share we keep up a correspondence
    extra approximately your post on AOL? I need an expert on this area to
    solve my problem. Maybe that’s you! Looking forward to see you.

  3. Anonymous

    Rick actually sounds like a normal “burn” victim. I’m a “lib” and I agree with him. Kate is an articulate decent person who may be misunderstanding Rick’s issues. And of course, Eric sounds like a colossal douche.

  4. Anonymous

    We did the same thing last year. we had almost $150 left in our FSA and didnt want to lose it. then our neighbor told us about the Fresh Air Club and how we should have our home air filters delivered instead of worrying about going to the store all the time (plus it was cheaper than home depot). So we went to http://www.freshairclub.com and signed up for their air filter subscription service. since my wife an i both suffer from allergies, this was a great way to keep the air in our home pollen free! Plus, we didn’t lose our FSA dollars.

  5. Anonymous

    I don’t really want to get i to a political discussion but Rick just sounds like an angry conservative with no viable solution to our healthcare crisis….the FSA is easy to use. I have a family of four and estimate my expenses based on insurance deductables and copays for things like routine physical exams (maybe I should skip these to keep demand/costs down?!! – then I could miss my tumor diagnosis and die), dental care (2x/year) and what I spend at Walmart on things like cold medicine, headache remedies, etc. All you have to do is keep a list of previous year’s expenses and go by that. If you have kids, orthodontics are covered so that’s a HUGE help! The feds are helping working families by giving them a much needed tax break on monies used for health services. BTW Rick, I have a child with rare congenital heart defects (a fluke of nature – NOT my fault) and you can’t imagine the hell I’ve been through getting coverage for her….anyone who thinks we don’t need a national “safety net” must walk a day in the shoes of the 1 million+ WORKING Americans born with some type of illness that the largely profitable insurance companies won’t cover! (I happen to have a degree in Business/Economics by the way)

  6. Anonymous

    I just finished spending my account at Healthwarehouse.com and got the most for my money! They have free shipping on everything, tons of over-the-counter products and 90 day prescriptions for $9.50. I got my stuff in 2 days with their free shipping, but they have expedited shipping if you want it.

  7. Anonymous

    walgreens.com is another site that I use to determine what items are eligible. If it is, there’s a FSA logo right next to the item. They also mark their FSA items on their price tags in the store now.

  8. Anonymous

    Things like this are exactly what’s wrong with our health care system.

    First of all, you have to estimate your health expenses. But really, who can do this? If you can nail down your health expenses to the dollar, why even bother having health insurance at all. No, the point of insurance is to prepare for the unexpected, so you certainly can’t know what to expect in the way of health expenses.

    But the bigger issue is that these FSAs artificially increase the demand for health care services. Just look at that list. If you have extra money in your FSA, go see a doctor. The point is, you wouldn’t have otherwise gone to the doctor, but because you have extra money, you have to spend it, and thus you go see a doctor. This clearly increases the demand for health services, and basic economics will tell you that an increase in demand for services will also increase the price of the services.

    I believe this is just another example of how the government screws things up. By meddling with health care, they are really just increasing the prices of health care.

  9. Anonymous

    A few years ago I sent DH out on new years eve to buy $70 worth of band-aids so we could get use up our FSA money before it expired. I don’t think we’ll ever run out!

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