How to use (not lose) your FSA money
Most people know that they can use their Flexible Spending Account (FSA) for prescription drugs and doctor’s visits. But it turns out that your FSA is quite, well, flexible—able to pay for a variety of health-related expenses with pre-tax money. That versatility is good, because an FSA is a “use it or lose it” plan. The funds expire at the end of the year, and can’t be recovered. (The stakes may be fairly high; you can put aside up to $2,650 per year in one.) So don’t let your FSA money fall through the cracks before Dec. 31. Even if you work for a company that gives employees a grace period of up to two-and-a-half months to submit claims for the previous year, or lets you carry up to $500 into the following year, why chance it?
Some quick tips:
- Use insurance first. Your FSA is meant to pay for specific medical expenses that aren’t covered by health insurance. So always max out your health coverage before looking to your FSA for reimbursement.
- Keep receipts. You’ll need them to substantiate claims.
- Start submitting early. You don’t have to wait for the money in your FSA to build up to have access to it. Even though it’s withdrawn in equal installments from your paychecks over the course of the year, the full amount is available to you from the first of the year.
Here are a few surprising areas where you’ll find FSA-eligible expenses.
Maybe the only good thing about having allergies is that the cost of pillows, air purifiers, mattresses, and vacuum cleaners might be covered under your FSA. Bobbi Rebell, a certified financial planner, explained that these items are typically covered if they are used to treat a specific allergy. You just have to get a statement from a licensed health care professional documenting that the allergy has been diagnosed, and that the products will actually help will alleviate the allergy symptoms.
Supplies for your eyes
If you’ve been eyeing a new pair of prescription glasses, sunglasses, or nonprescription reading glasses—or if you like to have a spare—now is the time to take the leap because the exam and the glasses are FSA-eligible.
Contact lenses? Stock up. “Any contact lens wearer will share horror stories of going to put in their contacts and dropping one on the floor with no chance of finding it,” said Wendy Harrington, chief marketing officer of the financial services firm Figure Technologies. Saline and enzyme cleaner are also FSA-eligible, so stock up on those, too.
Making moves for your teeth
Invisalign clear aligners or braces to perfect your smile are FSA-eligible if they’re recommended by an orthodontist. Consider this your motivation to book that appointment and explore the treatment options.
Starting a family? You can buy pregnancy and fertility testing kits with your FSA money. “Get some prenatal vitamins, too, since you’re supposed to start taking them before you conceive,” said author and blogger Donna Freedman. Condoms are covered by your FSA, too, if you want to forestall that family a little longer.
For the kids
If you’re already pregnant, now is a good time to pick up a breast pump (if your insurance doesn’t provide you with a free one) and sign up for the childbirth and breastfeeding classes you’ve been meaning to take. (You can likely pay the tuition with your FSA.) Kid-related staples like sunscreen, lip balm, thermometers, vaporizers, and first-aid products can also be claimed as FSA expenses.
Stock your medicine cabinet
As long as you get a written recommendation from your doctor, many over-the-counter medications—e.g., pain relievers, antacids, motion-sickness pills, and antibiotic ointments—can be paid for with FSA money.
For the supply closet
People who are chronically ill can spend FSA dollars on monitoring and testing devices. The “just-in-case” crowd can also pick up a few injury-related items like heating pads, cold packs, braces, and bandages.
Acupuncture, hypnosis, and chiropractic care are covered as long as you have proper documentation from your doctor. (Make sure that the practitioner is licensed and certified.)
If you’re not sure whether something is FSA-eligible, check IRS Publication 502, Medical and Dental Expenses, or ask your company’s HR rep. It may not be a scintillating read, but it could save you big bucks.