When you have a Flexible Spending Account (FSA), you set aside money before taxes to cover qualified out-of-pocket healthcare expenses for yourself and your family. As the year comes to an end, there are a few things you should be aware of so you can maximize your account’s benefits. Here are 4 things to know about your FSA before the year ends.
4 things to know about your FSA before the year ends
1. Your account balance
As with all banking accounts, you should have a general idea about how much money is in your account. This is especially important at the end of the FSA plan year. If you don’t spend down the available balance, you risk losing some (or all) of that money for good.
Your account information is available through the online portal or through your mobile app.
2. Use it or Lose it, Rollover, or Grace Period?
Do you know how your employer’s plan is setup? Your FSA will have one of the following:
- Use it or lose it: This is very straightforward. If you don’t use all of your money before the plan year ends, you lose the remaining balance.
- Rollover: You can roll over up to $550 to the next plan year. Depending on your employer, the amount could vary.
- Grace period: You have up to 2.5 months after the plan year ends to spend any unused funds. The time frame may vary depending on your employer.
Your summary plan description should have all the details. If you have questions, ask your benefits administrator or HR department.
3. Run Out Period
Good news! If you haven’t filed a claim for reimbursement for this past year, you may have extra time.
According to Captain Contributor:
“Run out is a predetermined period during which you can file claims for the previous year. In other words, if your run out period lasts until March 31, you would have until that time to file claims for expenses that happened before December 31. Run out periods provide a little extra time to get reimbursed. Keep in mind, the run out period varies by plan.”
4. Eligible Expenses and Receipts
Do you know which expenses are eligible for reimbursement and which are not? Many common goods and services include over-the-counter and prescription medications, co-pays, deductibles, eye exams and prescription eyewear, dental exams and treatments.
But there are so many more things you can use your pre-tax FSA dollars on. Here’s a list of qualified expenses.
It’s important to note that you need to keep your receipts, even if you use your benefits debit card, because your administrator may need them to verify your purchase.
Your receipt and claim form should provide the following information:
- Date and time of purchase
- What item or service was paid for
- Who the service was for (you or one of your dependents)
- Amount paid for the service/item
As you close out the year, keep these four important FSA-related things in mind so you can get the most out of your benefit dollars.