When it comes to navigating the world of employee benefits, there’s a lot to take in, especially if you’re a first timer. Among the suite of benefits you’re likely to be offered, voluntary benefits are often misunderstood. What are Some Examples of Voluntary Benefits? Voluntary benefits include a variety of options, all designed to...
Advantage Administrators’ Using Your FSA by Year’s End
We all know that the new year begins on January 1. But some people may not be aware that when the calendar flips, another important time frame relating to their benefits turns over too, one that could cost you in lost pre-tax dollars. That’s right: the funds in flexible spending accounts (FSAs) are generally “use it or lose it” by December 31 of each year. That means employees who have failed to use that money as of January 1 of the following year will forfeit that money to their employers, who can then use the funds to pay plan expenses or distribute it among all employees who also participate in FSAs. Unlike HSAs, contributions made to a FSA in a given year must also be spent on qualified medical expenses in that same year.
There are some exceptions to this rule—for instance, organizations are permitted to either incorporate a grace period of up to 2.5 months after the new year begins so employees can use their remaining FSA funds from the year before OR to allow the carrying over of $500 in FSA money into the next year.
But what if your employer doesn’t offer any of these FSA safe harbors and you’re facing the need to spend down your 2018 FSA contributions before year’s end or risk losing them? First, contact your benefits administrator to make sure you understand your current plan and where you stand in the remaining months of 2018.
Want more information? The benefits administration specialists at Advantage Administrators are here to provide you with some quick and easy tips to help you maximize your FSA—before it’s too late!
- Find out what’s a qualified expense and take inventory of your health situation. The money in your FSA can only be spent on qualified health and dependent care expenses. A good way to learn about what constitutes a qualified expense is to contact your plan administrator or visit FSAstore, an online store that sells only items that are eligible for FSAs. It’s important to remember that this category of expenses covers a wide range of healthcare products, including:
- Glasses and contact lenses
- Diabetes testing supplies
- Maternity care items
- Wheelchairs and mobility aids
- FSAs also can cover a variety of other medical expenses, regardless of whether you currently have insurance for those other areas:
- Dental, vision and hearing appointments
- Reimbursement of mileage for medical travel
- Office visits to your chiropractor or acupuncturist
- Specialized counseling services, such as mental health treatments
- Your FSA can be used to pay for your appointment as well as any applicable copays and coinsurance. FSA money CANNOT be applied to cover health insurance premiums and over-the-counter prescriptions.
- These funds can be applied for expenses for yourself, your spouse, and qualifying dependents such as your children (including adult children who are on your health insurance as long as they are 26 or under at the conclusion of the present plan year).
Need more help in spending your remaining FSA funds in 2018? Be sure to contact your plan administrator—and if that plan administrator is Advantage Administrators, feel free to contact us at any time or visit our website for more FSA information. We’ll help you tap into the power of your FSA!