A flexible spending account is a tax advantage program set up by your employer which allows you to set aside a certain amount of money from your salary to be used for qualified expenses, most commonly healthcare. The catch is you must set aside the money before the year begins and you must use it before the calendar year ends. So if you don’t use it you lose it. It is a guessing game of how much money to set aside for your health care needs and if you have money left over at the end of the year it goes to waste. Now, some employers are offering advantages to those who do not use up all the money in their FSA. One option is rolling over $500 into the next year’s account. The other option is having a “grace period” of two and a half months to use the remaining funds. Employers are not required to participate in either of these options, so check with your human resource department to see if you qualify for them.
A Health Savings Account (HSA) is another term you may have heard to describe this scenario. In many situations you can use HSA and FSA interchangeably, because they both let you set aside pretax dollars for healthcare. HSAs are different from FSAs because they roll over and sometimes include an employer match similar to a 401k. Both have limits to what you can set aside.
So here is the good part, if you still have funds in your FSA remember it can be used for:
- Dental care – exams, crowns, cleanings and fillings are all covered by these plans.
- Eye care – exams and even LASIK surgery can be covered. A lot of people are without eye plans on the insurance so this can be very helpful.
- Weight Loss Programs – if your doctor recommends it as medically necessary. That’s right, don’t “weight” for your New Year’s Resolution. Talk to your doctor today.
- Acupuncture – used for management of chronic pain, headaches and arthritis is usually covered. In some cases you may need a recommendation from your primary care physician.
- Chiropractic Care – exams and adjustments. No kidding….feel good this holiday season and get to your chiropractor.
Massage Therapy – “Say what, did you say massage?” Yes. Massage when recommended by a doctor is often covered under your HAS and FSA plans.
So don’t wait another day; the money in your account must be used by December 31st!!