To ensure you make the most of your Flexible Spending Account (FSA), it's crucial to understand the nuances and deadlines associated with this valuable benefit. By being proactive and informed, you can avoid common pitfalls and use your pre-tax dollars effectively on eligible healthcare expenses.

Unlock the Full Potential of Your FSA Before It's Too Late

Clarifying Your FSA Deadline

Understanding the exact deadline for spending your FSA funds is paramount. Many employees mistakenly believe they must spend their FSA balance by December 31st. However, the reality is more nuanced. The specific expiration date for your FSA depends on your employer’s policy. For instance, some companies operate on a fiscal year that doesn’t align with the calendar year. Rachel Rouleau, Chief Compliance Officer at FSAStore.com, advises checking with your HR department or FSA administrator to confirm your plan’s end date. “The majority of plans run from January to December, but this isn't universal,” Rouleau explains. Moreover, certain employers offer a grace period extending up to two-and-a-half months after the plan year ends. This means if your plan concludes on December 31st, you might have until March 15th of the following year to utilize your remaining funds. Additionally, some employers allow a limited carryover into the next plan year, though not in conjunction with the grace period.

Expanding Your FSA Purchases to Health Tech

Advancements in health technology have significantly broadened the range of items eligible for FSA reimbursement. Devices like blood pressure monitors, digital scales, and even wearable fitness trackers now qualify under IRS guidelines as healthcare expenses. Online retailers such as FSAStore.com and Amazon’s FSA Store offer an array of these tech-enabled products. However, before making a purchase, it’s essential to verify eligibility with your FSA administrator. Some items may require a letter of medical necessity from your doctor, proving the item is necessary for treating a specific condition. Nery Solano, Head of Consumer Marketing at TrueMed, emphasizes the importance of obtaining this documentation. “A letter of medical necessity can unlock access to a wide range of products,” Solano notes. TrueMed connects users with licensed practitioners who can provide these letters for items like exercise bikes, supplements, and cold plunge pools. Alternatively, you can request a letter from your primary care physician.

Leveraging Over-the-Counter Medications and Menstrual Products

Historically, FSA spending near the deadline often involved urgent purchases like prescription sunglasses or last-minute doctor visits. However, thanks to the 2020 CARES Act, the scope of eligible items has expanded dramatically. Now, you can use your FSA funds for virtually any over-the-counter medication, as well as menstrual products such as tampons, pads, and liners. This change provides greater flexibility and convenience for FSA holders. Despite this expansion, it’s wise to keep detailed records of all purchases. According to Rouleau, maintaining receipts is critical, even if your plan does not initially require them. “Always hold onto your receipts,” she advises. Documentation ensures you can substantiate expenses if needed, safeguarding your ability to be reimbursed without issues.