Don’t Let Your Unused FSA Dollars Go to Waste By Michelle Rivera, Communications Manager Health care can be quite expensive, and that’s not even accounting for any unplanned health care costs that can arise during your plan year. But the good news is that if you have a Flexible Savings Account (FSA) or Health Savings Account (HSA), you’ve already given yourself a safety net to catch some of those extra expenses that fall beyond your control.
It’s important to keep in mind that unlike an HSA account, which sees your funds roll over from year to year, your FSA funds must be spent within the plan year by Dec. 31, or within your employer’s grace period. If you don’t spend the funds in your FSA account by the deadline, then you risk forfeiting the remainder of your balance. In other words, FSA funds have a “use it or lose it” policy. So what kind of expenses do your FSA funds cover? Typically, you can use your FSA funds to pay for common health care expenses, and these include prescription medications, copays and medical supplies. But there are a lot of other approved products and services—also called qualified medical expenses—that you can purchase with your remaining FSA balance. As we approach the final quarter of the year, it’s important to check your remaining balance in your FSA account so you don’t end up forfeiting those funds. We’ve listed a few qualified expenses for you to consider. Over-the-counter (OTC) medications. Now would be a good time to stock up on or restock your medicine cabinets. You can use the money in your FSA account for OTC medications, including antacids, pain relievers, heartburn medications and more. Previously, most of these medications required a prescription to be FSA-eligible. Fortunately, the over-the-counter prescription requirement was repealed with the passage of the CARES Act in March 2020, making over-the- counter medicines fully eligible, with no restrictions for FSA or HSA account holders. At-home medical supplies. Consider stocking up on any at-home medical supplies you need for your home, including bandages, ointments, first aid kits, eczema creams, alcohol wipes and anything else that can help you care for minor medical issues you can easily treat at home. These items also apply to thermometers, heating pads, ice packs, compression socks and joint braces. Skincare products. Are you using any over-the- counter acne creams, serums, moisturizers, cleansing wipes or toners? You can use your FSA funds to cover these expenses. You can even use your funds on sunscreen with an SPF of 15 or higher. Eyeglasses and contacts. Is it time for an eye exam? Or maybe you’ve been considering a pair of prescription sunglasses? Call up your optometrist and
schedule an appointment. If you’ve been eyeing a pair of designer frames but didn’t want to break the bank, this would be a good time to put your funds toward an upgrade. You can also use your FSA funds to purchase contact lens solution and non-prescription reading glasses. And as a reminder for those who have a High Deductible Health Plan (HDHP) and utilize a HSA, the Internal Revenue Service (IRS) has announced that in 2024, you can contribute up to $4,150 (up from $3,850 in 2023) for single coverage, and up to $8,300 (up from $7,750 in 2023) for family coverage. Employees who are 55 and older can contribute an additional $1,000 as a catch-up contribution. Only employees who have a high deductible health insurance plan can open an HSA. If you’re still looking for ways to spend your unused FSA funds, you can visit the FSA Store, which offers more than 4,500 items that are FSA eligible: fsastore.com. For those with a HSA account, you can visit the HSA store for a comprehensive list of eligible items here: hsastore.com. There are also a number of retailers that will conveniently let you know if an item is FSA- or HSA-eligible when you shop online.
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SEPTEMBER | OCTOBER 2023
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