Important: Don’t Forget to Use Your Remaining 2016 FSA Funds!

by Jessica Sommerfield · 3 comments

In the craziness of last-minute holiday preparations, your health care coverage is probably one of the farthest things from your mind. Nevertheless, December is a very important month for some financial to-dos, and one of them is your flex spending account.

If you’re someone who signed up for an FSA during your annual benefits enrollment period but then pretty much forgot about it, you’re not alone.  After all, since it’s funded with before-tax payroll deductions, it’s “out of sight, out of mind.” Unfortunately, it’s also “use it or lose it,” and December 31st is the deadline (although some allow either a three-month grade period or a $500 roll-over allowance). Some statistics indicate roughly two percent of FSA contributions are forfeited this way every year. Since the maximum contribution is $2,500, there’s a potential for this much of your hard-earned money to be ‘donated’ back to your employer for FSA program costs and losses.

If you haven’t engaged with your FSA since signing that form, you may not know what your balance is, how to redeem the funds, or even what you can use it on. Those answers will vary depending on the specifics of your employer’s FSA, but here are some guidelines to help you “use it” to your advantage and avoid losing this valuable tax offset to the rising cost of health care.

How to Find Out What Your Balance Is

After you enrolled in the program, you should have received paperwork directly from the FSA provider with your account information along with and periodic statements. Many FSA providers also send reminders around September stating how much is left in your account along with the conditions and cut off dates for its use.

Secondly, your pay stub may also list your FSA contributions per payroll period and your total balance. If you have neither of these, ask your HR director for your FSA provider’s name and contact information so you can call and find out.

In Case You Forgot: How to Redeem the Funds

Most often, you’ll either be provided with a debit card to use for eligible expenses or need to keep your receipts to submit for reimbursement through your HR department.

What You Can Use Them On

“Out-of-pocket medical expenses” is a pretty vague term, so you’ll need to consult your FSA’s exact list of inclusions and exclusions, but in general, you can use the funds on any of the following:

  • Co-pays and out-of-pocket payments for doctor’s office fees and other medical care
  • Non-covered health care categories such as vision or dental, whether doctor’s fees, glasses, contacts, dental hardware, etc.
  • Rehab and preventative care services like physical therapy, therapeutic massage and chiropractic care
  • Non-covered prescriptions and OTC medications prescribed by a physician
  • Health-related purchases such as first aid supplies, cold and flu medications, etc.

Things like special foods or infant formula prescribed by a doctor may also qualify. The only way to know for sure is to check the full list from your FSA or HR department.

Give the Gift of Health This Holiday

Although it may seem like just one more thing on your list, think of using up your FSA funds as giving yourself and your family the gift of health this holiday. Schedule eye appointments for the whole family, fit in those check-ups you’ve been procrastinating about, treat your back to a much-needed visit to the chiropractor, or just stock your medicine cabinet for the cold and flu season. Any way you chose to “use it,” don’t let the heard-earned, ‘free’ health care funds in your FSA go to waste.

Did you use your FSA funds yet? What is your plan of attack if you still have money left over this year?

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  • Centsai says:

    FSA’s are great for some people and aren’t so beneficial for others! Thanks for the friendly reminder to those who have FSA’s to use it before your money disappears into thin air! Great article Jessica!

  • Ryan G says:

    FSA’s are great for people who have a lot of routine medical expenses. For someone who is young and healthy, chances are you won’t spend $2500/year. But the minimum for enrollment is $100, so designating a small amount can help cover the cost of a couple of doctors & dentist visits per year. For my family, my wife is a Type I diabetic, so we go through $2500 easily. I would allocate more if the rules allowed. I love paying for stuff with pre-tax dollars.

  • Latoya | Femme Frugality says:

    I used an FSA once and hate everything about it. I had to verify purchases, spend wastefully at the end of the year just to use it and ultimately had a bad experience with it. I know the savings are supposed to be there, but I hate having to jump through hoops for them.

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