Use it or lose it: Ways to spend down FSA funds
Don’t let one of your most important employee benefits go to waste
At the end of the year, deadlines are looming to spend your flex savings account (FSA). While the details differ from plan to plan, typically, most of the money that’s saved in the account can’t be rolled over into the next year. If you don’t find a way to spend it, you lose it.
It can be hard to kiss a pool of money goodbye that has come from your hard-earned paycheck. We’ve got the details on what things typically count as eligible, but the final word on whether something is allowed is based on the kind of plan you’re enrolled in. Before you spend, verify with your employer’s benefits administrator so that you can be 100% sure that the items are considered allowable expenses.
Surprise! These FSA expenses for healthcare are usually ok
Before you start to look at “out of the box” ways to spend down funds in your FSA account, consider routine things you’ve already bought that might be eligible. It’s true: some of the things that are eligible for reimbursement under your FSA accounts are such routine purchases that you’d never imagine your account would reimburse you for them.
It’s true: some of the things that are eligible for reimbursement under your FSA accounts are such routine purchases that you’d never imagine your account would reimburse you for them.
Many of these items are available at your local drugstore or supermarket. They are things like contact lens supplies, first aid kit supplies, over-the-counter medicines and personal care items. However, few people know that other everyday items, like sunscreen, parking costs for those doctors’ visits and hospital visits, electric toothbrushes or other at-home device purchases, health-related reading materials, and batteries for medical devices, can also count.
Take some time to take stock of all of the allowable items you may have purchased, and see what kind of payment documentation you have for each of them (in many cases, credit card statements are adequate proof). Add up the totals and submit your reimbursement request. You might be pleasantly surprised at how things have added up.
Catch up on doctor and dentist appointments and procedures
If you still have money left in your account once you know that you’ve submitted every allowable expense, consider catching up on your doctor and dentist appointments. At the same time, if you’ve been recommended for a specific procedure, especially something like a dental procedure that can be pricey even after regular insurance coverage maxes out, now is the time to have that work taken care of.
The only issue with this strategy is that almost everyone has caught onto this trick and you might find that it is hard to fit into your practitioner’s schedule at this time of year. Many practices understand why there’s an end of the year rush and will try to fit in as many patients as they can. However, if you can’t get an appointment with your regular practitioner for something simple, it may be worthwhile to visit a walk-in clinic and then have that practice forward your records to your regular doctor.
New parents have an extra list of eligible items
If you’ve become a new parent in the past year, you might be surprised to learn that you’ve got an extra-long list of items that are considered reimbursable FSA expenses. Baby care supplies, nursing supplies, certain baby monitoring devices, baby care books and more are all eligible. It’s well worth the investment of your time to comb through the list of eligible expenses and see what counts.
A deeper dive – Related reading from the 101:
- 5 Ways everyone can save money fast, even if you’re paycheck to paycheck | Finance 101
Maximize your savings by taking advantage of some of these tips.
- FSA or HSA? Which health savings plan is best for you
There are some important differences between the two types of plans that can affect how much they benefit you.