Use it or lose it: Health care FSAs from 2009 expire March 15
PORTLAND, Ore. – For those with employer-provided Health Flexible Spending Arrangement, today is the last day to use up the 2009 account.
FSAs are pre-tax accounts set up so money from each pay check is set aside tax free to use for eligible medical expenses, such as insurance deductibles, orthodontics and naturopathic care. It's one of several types of accounts that can help lower your tax bracket, since the contributions are not counted toward your income.
Funds can be spent on yourself or your taxable dependents. Unused funds, at the end of each year's grace period, usually are given to your employer. (Note that there is an exception for reservists ordered or called to duty, where unused funds are distributed back to reservists.)
FSAs also can help save for unexpected items like cough syrup, allergy medicine and hospital fees. My account comes with a handy FSA debit card that is simply swiped at the register and then pays for any eligible items out of its balance.
Employer-sponsored FSAs funded in one year, say 2009, are technically set up to be used during that same year: 2009. However, the federal government offers a two-and-a-half-month extension to make eligible purchases to take that balance down to $0.
That means, March 15 is the last day to make eligible purchases. The account holder must front the costs, since the ATM card doesn't dip into past year's balances, then submit the paperwork by March 31 to get reimbursed.
First, check your receipts and mileage log for eligible items you've already paid for out of your pocket. For example, mileage or costs spent driving, flying or otherwise going to receive medical care is reimbursable. I for one picked up a pair of custom-fit insoles to go with a new pair of boots this past year, and will be submitting that receipt for reimbursement.
Second, if you can wait for a refund (it takes about 30 days to be paid back), swing by the drug store today to pick up any of these eligible ideas:
- Pick up a pair of reading glasses. You also could get a new pair of prescription glasses, or load up on contacts and solutions.
- Stock the medicine cabinet with the following: off-the-shelf allergy medicine, antacids, antibiotic ointment, anti-fungal foot cream, anti-gas medication (you just never know when you may need that), antiseptic, bandages in all shapes and sizes, braces for your wrist if you're a heavy computer user or knees if you want to get back out to run, burn cream, cold and hot packs, cold sore treatment, cold and cough medication, contraceptives, eye drops, first aid supplies, insect bite treatments such as anti-itch cream or bee-sting antifolactics, throat lozenges and more. A full list of eligible expenses is here.
- Diaper rash ointment is eligible.
- Use the fund to help quit smoking. Note that though smoking cessation programs can be HSA expenses, reportedly in states such as Oregon insurance companies are required to cover 100 percent of the cost, up to $500, if you want to quit. In that case, consider plunking down on oxygen/oxygen equipment instead.
- Splurge on an ear-wax-removal kit. I found a reusable, sterilizable "syringe" - just fill it with warm shower water and gently squeeze - for around $7. This may seem weird, but I saw this on a travel show, and the host seemed to like it. We'll see....
Here are a few more interesting options, though these ones can only be paid out of the account if you can get a letter from a licensed health care practitioner (this includes naturopathics and chiropractors). The letter must address the "Medical Necessity" for these items, and must be processed by your benefits manager by March 31:
- Air conditioner, purifier or humidifier
- Dancing and swimming lessons
- Exercise equipment and a personal trainer
- Hypoallergenic linens
- Lumbar support
- Massage therapy
- Special foods (the account will cover the difference in price between, say, regular pizza and gluten-free pizza for those with a gluten intolerance)
- Vitamins and supplements
According to my benefits provider here's an interesting twist: "IRS regulations prohibit you from purchasing an unusually large amount of a particular over-the-counter drug. It would be reasonable if you purchased two or three of the same item, but anything over three items would be considered stockpiling and will not be reimbursed."
With three of each of your favorites in your medicine cabinet, you'll be putting those FSA dollars to work for months, even years, down the road. So treat yourself before March 15, and live healthier from this day forward.
- This article originally appeared at Gather.com.
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