FSA: Use It, Don’t Lose It – 5 Ways to Use Your FSA by Year End

December 12, 2011

As the year comes to a close, many people are decorating their homes for the holidays and stocking up their pantries for company.  Others who have Flexible Spending Accounts are scheduling colonoscopies instead!  What gives?  Since the FSA has a “use it or lose it” clause, the funds must be used for health purposes by the end of the year (however most plans give an extension for  6 – 8 weeks into next year).  So to take the full benefit of the funds set aside in the FSA, the funds must be spent soon.

If you have funds left in the FSA, here are some ideas on how to spend them:

Get prescriptions for over the counter medicines (and fill them).  Over the counter medication no longer qualify to be purchased with FSA dollars, but prescription medications are, so if applicable, obtain prescriptions from your doctor.  For example, I recently saw my doctor for a sore knee which I take over the counter anti-inflammatory medication for.  When I saw my doctor, I was able to get a prescription for a higher dose – I take fewer pills, and the medication is now FSA eligible.

Stock up.  If you wear contacts, order a three month or six month supply.  Order your prescriptions online for a three month supply, instead of a month at a time at the pharmacy.

Stop smoking.  If you are a smoker, enroll in a smoking cessation program in December.  December may not be the best month to quit, unless you live where I do – east of Salt Lake City, Utah.  It is literally 10 degrees outside today and because of the chilly weather, I don’t see anyone outside taking a smoke break!  If your plan allows you a grace period, then sign up in January or whenever you feel you’d have the best chance of a successful outcome.

Turn in your receipts.  Pull all your receipts together and turn them in for reimbursement.  As I found out with my employee business expenses, they don’t turn themselves in.

Check up. If you haven’t done annual check- ups with your physician or other health care professionals, do it now.  See the chiropractor to de-stress before the holidays.  Take care of what you may have been putting off even a colonoscopy!

Just remember that every dollar you spend, you are saving at least 25 percent and up to 40 percent since you aren’t paying federal, state or social security taxes on the funds.  It’s like black Friday for your medical needs, all year long.  It may take some planning to estimate your expenses and then some tracking to use the funds in the right way, but where else can you get a tax break like that?