If you signed up for a healthcare FSA this year you probably know it’s a use it or lose it plan. In other words, if you have a balance at the end of the plan year, you will lose the money if you don’t spend it on eligible expenses. Also, your employer isn’t permitted to refund any part of the balance to you.
With less than one week left in the year it’s important you don’t lose any of your balance. I recently logged onto my account online to check the balance. Fortunately, we’re not in a situation to have to do any last minute spending, but its okay if you do need to empty your account because there are some options.
2 Things to do before you spend the FSA balance
First, check with your employer as certain plans may offer a grace period for up to 2 ½ months (according the IRS) after the end of the plan year. If there is a grace period any expenses within the period can be paid using the balance in the plan.
Second, make sure you’ve submitted all of your expenses for reimbursement. I recommend checking the IRS eligible expenses list and determine if you’ve incurred any medical expenses on the list that have yet to be claimed. If so, make sure you still have the receipts and promptly submit your claims.
Eligible expense ideas
Here are a few last minute ideas if you determine you still need to use up your balance. Please double check the eligible medical expense list on the IRS website for more details and determine what is right for your situation.
Transportation expenses of a parent who must go with a child who needs medical care. I thought this one may be an interesting option to explore. If you’re like our family there have been a lot of trips taking our children to the doctor this year for various check-ups and when they’ve been sick. The IRS guidelines are specific, so make sure your situation applies.
Bandages or other over the counter medical supplies
I think this is typically the most popular idea for burning an FSA balance. Making a trip to a Sam’s club or Super Wal-Mart may be good places to stock up on such medical supplies.
Fees you pay to a Chiropractor for medical care
I think it’s typically easy to make an appointment if you do receive care from a Chiropractor. Although, the co-pay may be about the only thing you can deduct here. Also, seeing your dentist is another idea that fits in this category if you’re due for a check-up.
Contact lenses and the materials required for using them are eligible
This is another option to consider if you haven’t seen an eye doctor yet this year. Eyeglasses are also an expense that would fall into this area. I know that I could get an appointment fairly easy with a local doctor, if needed, and probably place an order before the end of the year.
Place an order for routine prescriptions
Finally, if you use routine prescriptions and are almost out of stock, it may be a good time to place an order.
Keep in mind, according to the IRS you cannot receive distributions from your FSA for the following expenses:
- Amounts paid for health insurance premiums.
- Amounts paid for long-term care coverage or expenses.
- Amounts that are covered under another health plan.
Do you have any other ideas for emptying your healthcare FSA?