Health benefits can be tricky to navigate, specifically a Flexible Spending Account or FSA. FSAs can be a tremendous benefit when used correctly. Unfortunately, many people unknowingly forfeit money when their FSA renews, usually on January 1st.
What is a Flexible Spending Account (FSA)
A Flexible Spending Account is an excellent way for individuals to set aside additional funds to cover expected or unexpected healthcare costs throughout the year. When working with FSAs, employers typically offer a structure that allows employees to deposit part of their paycheck directly into their FSA before withdrawing taxes. That means you can cover qualified medical expenses with pre-taxed income.
However, there are some stipulations to FSAs that are important to know before getting started. FSAs have a “use it or lose” rule. This means the money accumulating in your account throughout the year needs to be used by the end of the year, or you lose access to using it on your healthcare expenses.
Understanding Your Options
Not everyone has an FSA. If you are unsure if your company offers an FSA or if you are enrolled in it, start by reaching out to your company’s benefits coordinator, usually your HR Manager. They will provide you with the necessary information to become informed about your health benefit options.
If you have an FSA, be sure to understand these key parts of your plan.
- Your total contribution per pay period.
- What your employer contributes (if they do).
- How to submit a claim and receive the reimbursement.
- Any details around the plan’s potential grace period or carryover.
A grace period, usually two to three months, allows an employee to submit a claim that may go past the end of the calendar year. If you have a standard FSA that expires on January 1st, your grace period might extend to mid-March. While not all plans offer carryover if your’s does you may be allowed to keep up to $550 for the following year’s expenses.
Making a Plan
Don’t be one of the people who lose a portion of their income by not using their FSA funds! Once you understand your plan’s details, make a plan for how to spend your money. Not all healthcare expenses qualify for an FSA reimbursement. However, the eye exam you have been putting off, that second or backup pair of frames, or even additional contact lenses when you are getting low all qualify.
Want to learn more about your benefits or how to use your flex spending on necessary eye care needs? Schedule an appointment today or give us a call!