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A Flexible Spending Account (FSA) allows you to dedicate pre-tax money to eligible health care and out-of-pocket costs for you, your spouse, and your dependents. Employers who offer this benefit will withhold a certain amount of money each paycheck, pre-tax, for your FSA account. The money accumulated in your FSA account must go toward qualified health care expenses throughout the year.
As we approach the fourth quarter of the year, it’s time to check the remaining funds in your FSA account. Any funds not spent by December 31, 2022, will be forfeited. It’s an excellent time to look for ways to spend the money before it goes away. Check if your employer offers a grace period, allowing the spending of funds in the following year.
You can read more about how FSAs work in this IRS publication. But here are a few fast facts about FSA’s from Healthcare.gov:
- The FSA limit is $2,850 per year per employer. If you’re married, an additional $2,850 can go into your spouse’s FSA with their employer.
- FSA funds can pay for certain medical and dental expenses for you, your spouse if you’re married, and your dependents.
- FSA funds can pay deductibles and copayments, but not insurance premiums.
- FSA funds can pay for prescriptions and over-the-counter medicines with a doctor’s prescription. Reimbursements for insulin are allowed without a prescription.
- FSAs may also cover medical equipment costs, such as crutches, supplies like bandages, and diagnostic devices like blood sugar test kits.
If you have taken care of your primary annual medical needs and still have money in your account, check this list of Eligible Health Care FSA (HC FSA) Expenses. Many people don’t take advantage of all the approved FSA items and miss out on using up the funds in their accounts. Here are some common and unexpected ideas for spending that money wisely to meet current, upcoming, or unforeseen health needs.
Accumulating surplus over-the-counter medication such as allergy treatment, pain relievers, and cold medicine is a typical way to zero your FSA. If your health care plan doesn’t cover eye and dental care, use your FSA account to cover costs for exams or procedures. Do you have a spare set of glasses in case your current pair breaks or goes missing?
Home Health Care
Use your FSA to prepare for medical emergencies, injuries, and illnesses. A complete First Aid Kit contains bandages, scissors, an ice pack, safety pins, and over-the-counter medications like aspirin, anti-itch medications, and insect bite creams.
A no-contact instant digital infrared thermometer makes taking a temperature easy and mistake-proof. Readings occur within seconds, and many thermometers store previous data.
A Pulse Oximeter measures blood oxygen levels. It is an easy, painless measure of how well oxygen reaches the extremities furthest from your heart, such as the arms and legs. Anyone who has experienced a heart attack or heart failure, has chronic obstructive pulmonary disease (COPD), asthma, or pneumonia can benefit from having a pulse oximeter at home.
Medical supplies like automated external defibrillators, blood pressure monitoring devices, and blood sugar test kits are FSA-eligible.
Many medical procedures are eligible for FSA spending, including:
- In vitro fertilization
- Genetic testing through services like 23andMe Health Service
- Laser vision correction surgery
Did you know that mileage to and from eligible care is a qualified expense?
Exercise and Wellness
FSAs can also pay for certain wellness expenses. A medical practitioner’s note or prescription must accompany the expense on submission. For the expense to be eligible, the product or service must treat a specific medical condition for a finite duration. These could include:
- Massage therapy
- Gym or health club monthly membership fee
- Personal trainer
- Dietary or herbal medicines to treat medical conditions
- Fiber supplements to treat medical conditions
- Weight loss drugs to treat a disease
Vaccines and COVID-19 Tests
A vaccine is a biological preparation that provides active acquired immunity to a particular infectious disease. Vaccines take the form of injections, liquids, pills, or nasal sprays. Vaccines work by teaching your body’s immune system to recognize and defend against harmful germs. Obtain the following vaccines using your FSA account:
- Flu shots
- Travel vaccines
- Hepatitis A
- Hepatitis B
- Chicken Pox
Family Planning and Care
Knowing what family care expenses are eligible for FSA spending can be confusing. For example, diaper rash ointment is, but diapers are not. Many services and items, however, are covered, including fertility treatments, contraception, condoms, and pregnancy tests for family planning. Childbirth classes, breastfeeding classes, prenatal vitamins, lactation supplies, and breast pumps are qualified items for pregnant or new moms.
Learning disabilities result from genetic and/or neurobiological factors that alter brain functioning and affect one or more cognitive processes related to learning. If you suspect or know your child may have a learning disability, Learning Disabilities Testing and Developmental Services are covered. FSA funds can cover early intervention, therapy, and tools such as braille books.
So, don’t lose the FSA dollars in your account. While your employer may offer a grace period or a carry-over amount, it’s not required by law. With all the eligible expenses and a little planning, you can make the most of your FSA money and care for many of your family’s health needs.
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