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Media Coverage

Nov 20, 2014 Sharing Last-Minute Ways to Maximize FSAs (SHRM)

Nov 17, 2014 Last-Minute Ways to Maximize Flexible Spending Accounts (The IHCC)

Nov 14, 2014 Last-Minute Ways to Maximize FSAs (BenefitsPro)

Oct 3, 2014 Spending Down your Flexible Spending Account (Kiplinger)

Sep 19, 2014 Rule Changes Increase Flexibility in Pretax Health Care Accounts (New York Times)

Sep 12, 2014 Institute for HealthCare Consumerism: Radio Interview with Jeremy Miller (IHCC)

Sep 4, 2014 FSA Rollover Change Offers More Flexibility (BenefitsPro)

Aug 25, 2014 FSA Open Enrollment Reminders by Jeremy Miller (Society for Human Resource Management (SHRM))

Jun 30, 2014 New Rules for (Some) Flexible Spending Accounts (Kiplinger)

May 27, 2014 5 Unique Ways to Spend FSA Dollars (Employee Benefit News)

Mar 11, 2014 For some with Flexible Spending Accounts, Time to Act (New York Times)

Mar 7, 2014 March Deadlines for Flexible Spending Accounts Still in Force (Forbes)

Feb 14, 2014 Navigating New rules for Flexible Spending Accounts (Kiplinger)

Jan 23, 2014 10 Ways to Spend Your FSA Before it Disappears (EverydayHealth.com)

Aug 6, 2013 Make Sure Your Flexible Spending Account Dollars End Up in Your Pocket, Not Your Employer's (Yahoo)

Jun 28, 2013 FSAstore.com Reminds Consumers to Take Advantage of Online Purchasing Using Flexible Spending Accounts That Might Expire on June 30 (Marketwatch.com)

Apr 14, 2013 Delivering the perfect pitch (Crain’s New York Business)

Feb 28, 2013 Last-Minute Ideas to Beat the Flexible Spending Account Deadline (Kiplinger.com)

Jan 31, 2013 Flexible Spending Accounts, Decoded (realsimple.com)

Dec 26, 2012 Use Your Flexible Spending Account Funds Before It’s Too Late (simplystated.realsimple.com)

Dec 26, 2012 13 ways to save money in 2013 (Detroit Free Press)

Dec 19, 2012 Deadline to spend health care FSA funds (San Francisco Chronicle)

Dec 19, 2012 Time's Running Out On Your Flexible Spending Account: How To Get Your Money's Worth (Hartford Courant)

Dec 16, 2012 Savage: Money strategies to use before year ends (Chicago Sun-Times)

Dec 9, 2012 Tips on how to use your Flexible Spending Account (The Miami Herald)

Nov 27, 2012 Changes to Your 2013 FSA Account (blogs.webmd.com)

Nov 19, 2012 Money still in your Flexible Spending Account? Use It or Lose It (US News)

Nov 16, 2012 Staying smart about end-of-year healthcare (LA Times)

Oct 11, 2012 FSAstore.com plots expansion course (Crain's New York Business)

Oct 10, 2012 FSAStore Raises Series B Venture Capital (VentureDeal)

Oct 10, 2012 Crain's Health Pulse Newsletter (Crain's "Health Pulse" Newsletter)

Oct 9, 2012 Venture Capital Deals (Fortune/CNNMoney.com)

Oct 9, 2012 FSAstore.com Closes More Than $2M for FSA-Eligible Products (Dow Jones Venture Wire)

Dec 5, 2011 Money Fix: Unlock your FSA funds (Newsday)

Oct 31, 2011 Some Help Getting Reimbursed for OTC Drugs (NYTimes.com)

Oct 21, 2011 Flexible-Spending Accounts: Worth the Hassle? (MarketWatch.com)

Jul 18, 2011 Make sure you're tracking your FSA account (Shopsmartmag.org)

Jul 8, 2011 Columbia Business School Proves Fertile Ground for Health-Care Startup (About.com)

Jul 5, 2011 Startup simplifies flexible spending accounts (Crain's New York)

Jun 21, 2011 After Open Enrollment: 5 Tips to Help Employees Wisely Use Their Benefits (asjonline.com)

Jun 15, 2011 The Secret to Maximizing Your Flexible Spending Account! (FlexibleSpendingAccountsonline.com)

Jun 8, 2011 Don't Leave Medical Reimbursement Money on the Table (Dailyfinance.com)

May 23, 2011 Venture Capital Deals (CNNMoney.com)

Apr, 2011 Millions of health care dollars at stake as FSA deadline looms (InsuranceQuotes.com)

Apr 2, 2011 Columbia Business School Alumni Profile: Jeremy Miller '10 on his Company, FSAStore.com, and Entrepreneurial Perseverance

Mar 14, 2011 Manhattan Startup Targets FSAs (Crain’s Health Newsletter)

Mar 11, 2011 Time is running out to spend FSA dollars (Star Tribune)

Mar 11, 2011 FSA Money: 4 Days to Use It or Lose It (DailyWorth)

Mar 9, 2011 Seven Tips for Spending Down Your FSA Fast! (Walletpop)

Mar 7, 2011 Extra Time To Cash In On Flex Spending (New York Daily News)

Feb 4, 2011 Four Steps to Maximize Your Flexible Spending Account (Walletpop)

Feb 1, 2011 FSA changes go into effect (Benefits Selling)

Jan 26, 2011 Medical savings face changes: New limits to be imposed on flexible spending accounts. Millions in tax-free money could be lost (The Atlanta Journal – Constitution)

Jan 11, 2011 Time running out on FSAs (Reuters)

Jan 3, 2011 IRS adjusts FSA debit card restriction (Benefits Selling)

Nov 29, 2010 Flexible Spending Accounts: New Rules (SmartMoney.com)

 

Sharing Last-Minute Ways to Maximize FSAs

By Jeremy Miller, November 24, 2014

It’s Dec. 1 and Renee is starting to panic.

“I don’t want to lose any of my FSA money. When is the deadline? What expenses are covered? How much money do I have left to spend? I have to find a way to spend this money … fast! Where do I go to find my balance information?”

Renee’s concerns aren’t unique. She is among the 35 million account holders who made tax-smart allocations to their flexible spending accounts for 2014. She’s also among the 51 percent who wait until December to spend their FSA dollars.

But even though employers have offered FSAs as part of their benefit plans since the 1970s, plan design options have changed. In 2013, the U.S. Treasury Department and IRS made some changes to FSAs that make the plans a bit more flexible. These changes to the “use it or lose it” rule give employers an option to let employees carry over up to $500 in unused FSA dollars to the next plan year, or to offer a grace period – a two-and-a-half month extension to spend remaining FSA money.

Deadlines and terms

Dec. 31 is a big day for FSA holders. For many, this could be the last day they’re allowed to spend their FSA funds on eligible expenses — or risk forfeiting their account balance to their employer. This is commonly known as the “use it or lose it” rule associated with this year-end deadline.

Under the new regulations, 2013 was the first year employers could consider a menu of FSA plan options to extend that deadline, giving employees more time and flexibility. Those options include:

1. Carryover (or rollover) option: If an FSA plan includes this, employees can carry over up to $500 of unused FSA dollars to next year. Employers determine the carryover amount.

2. Grace period: If a plan includes a grace period option, employees have an additional two-and-a-half months beyond Dec. 31 (until March 15) to spend unused FSA dollars.

3. Run-out period: If a plan includes a run-out period, employees have additional time beyond the year-end deadline to submit reimbursement requests for eligible expenses — but only if those expenses were incurred during the plan year. The run-out period is usually 90 days, which would make March 31 the last day to submit receipts and reimbursement requests.

Employers can offer the carryover option or a grace period — but not both. They’re not required to offer any of these options, but if a plan includes an extended deadline, employees have more time and flexibility in how to use their accounts and meet changing health needs.

According to Alegeus Technologies, in 2015, there likely will be even higher FSA enrollment due to the carryover change. Alegeus enrollment data showed 8 percent of employer groups adopted the carryover for 2014 FSA plans, but that’s anticipated to increase. The carryover feature eases concerns consumers might have about losing their money.

Using — not losing — account dollars

Once employees know deadlines for spending FSA funds, they can focus on using their accounts to purchase eligible expenses that make sense for them and their families.

Let’s go back to Renee. Frequent and consistent communications from her employer are key to ensuring that she, and employees like her, make the most of their FSA and don’t risk losing their money.

Sharing these three spending tips will help her have a frenzy-free December and stay in control of her FSA dollars:

Know what’s FSA-eligible. Check your plan guidelines to learn which products and services can be purchased with FSA account dollars. There are thousands of products you can buy with an FSA, and you also can use an FSA to cover co-pays, deductibles and coinsurance for different medical services.

Use your FSA debit card, online or in person,if your employer offers one. FSA debit cards are convenient, and FSA money will be automatically deducted when using your card — so there’s no waiting for reimbursement for out-of-pocket expenses you incur.

Keep track of your FSA account balance. If your employer offers an account tracker or calculator, take advantage of it so all of your available FSA dollars are used before deadlines.

Visit SHRM.com for more information

Last-Minute Ways to Maximize Flexible Spending Accounts

By Jeremy Miller, November 17, 2014

It’s Dec. 1 and Renee is starting to panic.

“I don’t want to lose any of my FSA money. When is the deadline? What expenses are covered? How much money do I have left to spend? I have to find a way to spend this money … fast! Where do I go to find my balance information?”

Renee’s concerns aren’t unique. She is among the 35 million account holders who made tax-smart allocations to their flexible spending accounts for 2014. She’s also among the 51 percent who wait until December to spend their FSA dollars.

But even though employers have offered FSAs as part of their benefit plans since the 1970s, plan design options have changed. In 2013, the U.S. Treasury Department and IRS made some changes to FSAs that make the plans a bit more flexible. These changes to the “use it or lose it” rule give employers an option to let employees carry over up to $500 in unused FSA dollars to the next plan year, or to offer a grace period – a two-and-a-half month extension to spend remaining FSA money.

Deadlines and terms

Dec. 31 is a big day for FSA holders. For many, this could be the last day they’re allowed to spend their FSA funds on eligible expenses — or risk forfeiting their account balance to their employer. This is commonly known as the “use it or lose it” rule associated with this year-end deadline.

Under the new regulations, 2013 was the first year employers could consider a menu of FSA plan options to extend that deadline, giving employees more time and flexibility. Those options include:

1. Carryover (or rollover) option: If an FSA plan includes this, employees can carry over up to $500 of unused FSA dollars to next year. Employers determine the carryover amount.

2. Grace period: If a plan includes a grace period option, employees have an additional two-and-a-half months beyond Dec. 31 (until March 15) to spend unused FSA dollars.

3. Run-out period: If a plan includes a run-out period, employees have additional time beyond the year-end deadline to submit reimbursement requests for eligible expenses — but only if those expenses were incurred during the plan year. The run-out period is usually 90 days, which would make March 31 the last day to submit receipts and reimbursement requests.

Employers can offer the carryover option or a grace period — but not both. They’re not required to offer any of these options, but if a plan includes an extended deadline, employees have more time and flexibility in how to use their accounts and meet changing health needs.

According to Alegeus Technologies, in 2015, there likely will be even higher FSA enrollment due to the carryover change. Alegeus enrollment data showed 8 percent of employer groups adopted the carryover for 2014 FSA plans, but that’s anticipated to increase. The carryover feature eases concerns consumers might have about losing their money.

Using — not losing — account dollars

Once employees know deadlines for spending FSA funds, they can focus on using their accounts to purchase eligible expenses that make sense for them and their families.

Let’s go back to Renee. Frequent and consistent communications from her employer are key to ensuring that she, and employees like her, make the most of their FSA and don’t risk losing their money.

Sharing these three spending tips will help her have a frenzy-free December and stay in control of her FSA dollars:

Know what’s FSA-eligible. Check your plan guidelines to learn which products and services can be purchased with FSA account dollars. There are thousands of products you can buy with an FSA, and you also can use an FSA to cover co-pays, deductibles and coinsurance for different medical services.

Use your FSA debit card, online or in person,if your employer offers one. FSA debit cards are convenient, and FSA money will be automatically deducted when using your card — so there’s no waiting for reimbursement for out-of-pocket expenses you incur.

Keep track of your FSA account balance. If your employer offers an account tracker or calculator, take advantage of it so all of your available FSA dollars are used before deadlines.

Visit theIHCC.com for more information

Last-Minute Ways to Maximize FSAs

By Jeremy Miller, November 14, 2014

It’s Dec. 1 and Renee is starting to panic.

“I don’t want to lose any of my FSA money. When is the deadline? What expenses are covered? How much money do I have left to spend? I have to find a way to spend this money … fast! Where do I go to find my balance information?”

Renee’s concerns aren’t unique. She is among the 35 million account holders who made tax-smart allocations to their flexible spending accounts for 2014. She’s also among the 51 percent who wait until December to spend their FSA dollars.

But even though employers have offered FSAs as part of their benefit plans since the 1970s, plan design options have changed. In 2013, the U.S. Treasury Department and IRS made some changes to FSAs that make the plans a bit more flexible. These changes to the “use it or lose it” rule give employers an option to let employees carry over up to $500 in unused FSA dollars to the next plan year, or to offer a grace period – a two-and-a-half month extension to spend remaining FSA money.

Deadlines and terms

Dec. 31 is a big day for FSA holders. For many, this could be the last day they’re allowed to spend their FSA funds on eligible expenses — or risk forfeiting their account balance to their employer. This is commonly known as the “use it or lose it” rule associated with this year-end deadline.

Under the new regulations, 2013 was the first year employers could consider a menu of FSA plan options to extend that deadline, giving employees more time and flexibility. Those options include:

1. Carryover (or rollover) option: If an FSA plan includes this, employees can carry over up to $500 of unused FSA dollars to next year. Employers determine the carryover amount.

2. Grace period: If a plan includes a grace period option, employees have an additional two-and-a-half months beyond Dec. 31 (until March 15) to spend unused FSA dollars.

3. Run-out period: If a plan includes a run-out period, employees have additional time beyond the year-end deadline to submit reimbursement requests for eligible expenses — but only if those expenses were incurred during the plan year. The run-out period is usually 90 days, which would make March 31 the last day to submit receipts and reimbursement requests.

Employers can offer the carryover option or a grace period — but not both. They’re not required to offer any of these options, but if a plan includes an extended deadline, employees have more time and flexibility in how to use their accounts and meet changing health needs.

According to Alegeus Technologies, in 2015, there likely will be even higher FSA enrollment due to the carryover change. Alegeus enrollment data showed 8 percent of employer groups adopted the carryover for 2014 FSA plans, but that’s anticipated to increase. The carryover feature eases concerns consumers might have about losing their money.

Using — not losing — account dollars

Once employees know deadlines for spending FSA funds, they can focus on using their accounts to purchase eligible expenses that make sense for them and their families.

Let’s go back to Renee. Frequent and consistent communications from her employer are key to ensuring that she, and employees like her, make the most of their FSA and don’t risk losing their money.

Sharing these three spending tips will help her have a frenzy-free December and stay in control of her FSA dollars:

Know what’s FSA-eligible. Check your plan guidelines to learn which products and services can be purchased with FSA account dollars. There are thousands of products you can buy with an FSA, and you also can use an FSA to cover co-pays, deductibles and coinsurance for different medical services.

Use your FSA debit card, online or in person,if your employer offers one. FSA debit cards are convenient, and FSA money will be automatically deducted when using your card — so there’s no waiting for reimbursement for out-of-pocket expenses you incur.

Keep track of your FSA account balance. If your employer offers an account tracker or calculator, take advantage of it so all of your available FSA dollars are used before deadlines.

Visit Benefitspro.com for more information

Spending Down Your 2014 Flexible Spending Account

By Kimberly Lankford, October 3, 2014

Did the law change so I don’t need to worry about spending down my flexible spending account by the end of the year?

Last year, the Treasury Department changed the rules so companies could allow employees to carry over $500 in their medical FSAs from one year to the next. But employers weren’t required to make the change. Some offer the $500 carryover, but some still offer a grace period until March 15 to use the money instead (they can’t offer both the carryover and the grace period). And some employers offer neither option, requiring you to use the money by year-end. A survey by Visa and WageWorks, which administers FSAs for employers, found that 53% of employers planned to offer the carryover in 2014. Ask your employer about its rules.

Even if your employer offers the $500 carryover, you may need to do some last-minute spending if your account balance is above that level. Now is the perfect time to schedule some year-end appointments to use up more of the money, such as for dental and vision care that isn’t covered by your health insurance.

You can use the health-care FSA money for your deductible, co-payments and medical and prescription-drug expenses that weren’t covered by insurance, as well as for eyeglasses, prescription sunglasses, contact lenses and lens solution, prenatal vitamins, breast pumps, hot and cold packs, knee and ankle braces, thermometers, blood-pressure monitors, vaporizers, heating pads, pregnancy test kits, bandages, first-aid kits and even some sunscreens, says Jeremy Miller, president of FSAStore.com, which sells FSA-eligible items. See 7 Smart Uses For Your Flex-Account Money for more FSA spending ideas.

If you have a dependent-care FSA, you still have to use all the money in that account by December 31. You can use it for the cost of day care, a nanny or a babysitter while you work, before-school or after-school care, and even day camp for the summer or school breaks-- as long as your child is under 13. For more information about those rules, see Reimbursing Yourself from a Flexible Spending Account.

Visit Kiplinger.com for more information

Rule Changes Increase Flexibility in Pretax Health Care Accounts

By Ann Carrns, September 19, 2014

AS open enrollment season approaches for those with workplace health benefits, employees may want to take a fresh look at health care flexible spending accounts, if their employers offer them, because the rules for the accounts have changed.

Flexible spending accounts, or F.S.A.s, can help save money by letting people use pretax dollars to pay for costs a health plan doesn’t cover. That might include dental care, fertility treatments or equipment like blood pressure monitors. About 14 million families participate in health F.S.A.s, the federal government estimates.

While roughly 85 percent of big employers offer health care F.S.A.s, fewer than a quarter of eligible employees use them, according to 2013 data from the benefits consultant Mercer. One deterrent was the “use it or lose it” rule: If you set aside part of your salary in an F.S.A. but didn’t spend it, you would forfeit it at the end of the year. Even though many employers allow a two-and-a-half-month grace period for workers to submit claims, many employees remained cautious.

That’s changing, however. Late last year, the Treasury relaxed the rules and gave employers the option of letting workers carry over unused F.S.A. balances of up to $500 into the next year. Some employers made the change right away, but adoption was limited because the rule was announced after open enrollment was already underway at many workplaces. More employers are expected to adopt the carry-over for 2015, which means their workers will be made aware of it this fall. “Every indication is that most are choosing to offer the rollover opportunity,” said Robert Natt, executive chairman of Alegeus Technologies, which provides payment systems for employers and benefits administrators that offer various tax-favored accounts.

Just how many will in fact make the switch, however, remains to be seen. Steve Wojcik, vice president for public policy at the National Business Group on Health, which represents large employers, said that of 60 members responding to an internal poll, more than a third said they would adopt the change for 2015, and roughly a quarter more said they were considering it.

At PrimePay, a payroll services and human resources consultant, participation has increased by 17 percent at clients that have already made the switch, said Steve Jackson, the company’s senior vice president for strategic development.

“I honestly think it will make people more comfortable about putting money into F.S.A.s,” said Bruce Elliott, manager of compensation and benefits for the Society of Human Resource Managers.

One caveat: More companies are offering high-deductible health insurance plans, which are often paired with tax-advantaged health savings accounts, or H.S.A.s, to help pay for costs the plans don’t cover. If you have an H.S.A., you can’t also have an F.S.A., said Roy Ramthun, a health benefits consultant — unless the flexible spending account is limited to certain categories, like vision or dental costs.

Here are some questions about F.S.A.s:

Does my employer have to offer the carry-over option?

No. It’s optional. Employers may choose to allow a grace period instead (but they can’t offer both a carry-over and a grace period). Employers also can set a cap on the carry-over amount below $500, if they choose. Check with your human resources department for details.

How much income can I set aside in an F.S.A.?

The maximum annual contribution is $2,500, adjusted for inflation; employers can set a lower cap, if they choose. (The I.R.S. hasn’t announced the 2015 limit, but it’s likely to be $2,500 or slightly higher, Mr. Natt said.) Minimum contributions vary by employer. The federal government, which recently announced it would adopt the carry-over option for employees starting in 2015, also lowered the minimum contribution to $100 from $250, to encourage more federal workers to use the F.S.A. benefit.

How should I decide how much to contribute to my F.S.A.?

If you know you’ll have a big expense, you may want to set aside the maximum amount allowed. If a child needs braces, for instance, you could spend $2,500 fairly quickly. If you’re unsure, you could stick with $500, or whatever carry-over your employer allows, since you won’t risk losing access to the funds. You can also try using an online contribution calculator like the one at FSAstore.com, a website that sells F.S.A.-eligible items.

If I carry over $500, can I still contribute the annual maximum?

Yes. The carry-over amount is in addition to the maximum contribution amount set by your employer. So if you carry over $500, and the maximum contribution is $2,500, you’ll have $3,000 available in your account.

Visit NYTimes.com for more information

Institute for HealthCare Consumerism: Radio Interview with Jeremy Miller

Listen to the interview here

FSA Rollover Change Offers More Flexibility

By Scott Wooldridge, September 4, 2014

Flexible spending accounts have always been an attractive option for those on employer-sponsored health plans. But one provision has traditionally soured the deal for some.

FSAs “use it or lose it” rules have required enrollees to use all of the tax-free money they put into FSAs by the end of the year (sometimes with a grace period), or they lose the money. Many unnecessary pairs of glasses have been bought as consumers try to get something of value with their lingering account balances.

But “use it or lose it” has changed. In 2013, the Treasury Department amended the FSA rules, allowing consumers to roll over $500 from one year to the next. With an estimated 35 million Americans using FSAs, the new rule could have a huge impact.

“That’s a substantial change,” said Bruce Elliott, manager of compensation and benefits for the Society for Human Resource Management. Elliot added that the rollover provision could change FSA participation in two ways.

“I think we’re going to see higher levels of participation [in FSAs] and higher levels of elections — where the employee will contribute the maximum or close to the maximum level,” he said.

The change was greeted enthusiastically by employers and third-party-administrators, which help companies oversee health plan offerings such as FSAs. WageWorks, a San Mateo, Calif.-based company that specializes in administrating consumer-directed benefits, praised the move, saying it will help eliminate wasteful spending by employees trying to use up FSA dollars at the end of the year.

According to Laurie Lemay, chief relations officer for HRC Total Solutions, a Manchester, N.H.-based TPA, benefits groups have been asking regulators to change the “use it or lose it” rule for years. She says the new rollover provision will bring more people to the FSA model.

“We expect it to have a positive impact,” she said. “A lot of employers have decided to adopt it.”

Businesses should note the change is not automatic; companies still have to choose whether to offer the new rollover provision, and they will need to inform employees if they make the change.

A popular benefit, but…

2014 survey showed Elliot’s group that 68 percent of businesses offered medical FSAs.

Even with that relatively high take-up rate, some have been wary of FSAs. The “use it or lose it” provision has been cited repeatedly as a disincentive to participate in the accounts. Health care costs can be hard to predict precisely, and consumers feared ending the year with significant amounts of money sitting still unspent in the accounts. Even with some companies offering grace periods—for example allowing employees to use their FSA account funds through March of the next year — the prospect of forfeiting dollars at the end of the year was troubling to some.

“One of the main things that people cite in surveys about FSAs is that they fear losing their money,” said Jeremy Miller, FSA Store.com founder and president.

Miller’s company works with TPAs such as HRC Total Solutions, and provides an Amazon.com-type retail website for FSA accountholders. The site provides tools and education about spending accounts, along with a wide range of health care products.

Miller said the lack of a rollover feature in plans with FSA might have played a role in the rising popularity of health savings accounts. Although the latter have high deductibles, their funds are portable (an enrollee can keep the account if their employment status changes) and the funds roll over from year to year.

“HSAs have been on the rise, and FSAs have had pretty flat growth,” he said. “Hopefully this rollover provision will increase that growth.”

Timing is everything

Both Miller and Elliot noted that after the rule change in October, there was not an immediate jump in the number of companies offering the FSA rollover feature, but they said that could change.

“That rule change came so late in the year,” Elliot said. “Most employers had already started their open enrollment period, so they really didn’t have time to amend their FSA plan documents.”

He said he expects more employers will include the $500 rollover feature this year in their plans.

“I anticipate a large majority of employers are going to take advantage,” he said. “Because it doesn’t cost a lot to do that, and it’s kind of a feel-good thing for employers to do for employees.”

Getting the word out

According to Miller, educating employees about FSA rules, including the new rollover rule, can help boost participation. He said companies should inform employees about the new rollover rule, or, if a company has a grace period for FSA accounts, make sure employees know the deadlines.

Companies also can educate employees about what items and expenses are covered by their company’s FSA. For example, Miller said, many consumers don’t know that common items such as sunscreen and first-aid kits are covered by many FSA accounts. Other tools, such as FSA debit cards and calculators, can help enrollees feel more comfortable with using the accounts, he added.

Miller also noted that consumers might have to invest a bit more time in thinking about their health care spending when considering FSAs. He estimates that $400 million in FSA funds are lost each year because employees don’t understand their plans or don’t know what’s covered.

“Most people just think about this during open enrollment, and there’s kind of a rush to grab a plan. If they can just plan ahead and look to see what’s covered, it can result in a considerable tax savings,” he said.

Elliot said employers seeking to implement the rollover provision should work with the TPAs to update their company health plan documents and summary plan descriptions, in order to make sure that those documents reflect the FSA changes.

“Their TPAs should be working with them, and should be reaching out to them proactively to begin the plan amendment process,” he said. “Because you want that amendment in place before the end of this year. And it really is a pretty simple process.”

Lemay said her group is seeing a number companies switch from the old grace period arrangement to use the rollover provision instead.

“At the end of the day, it’s a benefit for the employee, and it’s a way to make sure they keep and use their money,” she said of the rollover. “It’s been a long time coming, and it’s a welcome change.”

Visit Benefitspro.com for more information

FSA Open Enrollment Reminders by Jeremy Miller

By Jeremy Miller, August 25 2014

Flexible spending accounts (FSAs) continue to garner significant interest and questions from employees during open enrollment. But open enrollment doesn’t have to be complicated. The following tips can help employers to educate their workforce about the benefits of these tax-advantaged accounts.

Tips for Employers

Last year, the U.S. Treasury Department and IRS made some favorable changes to FSAs by altering the long-standing “use it or lose it” rule, allowing employers to offer a carryover of up to $500 in unused FSA funds to the following year or to continue a grace period option giving a two-and-a-half month extension to spend remaining FSA funds. FSAs cannot have both a carryover and a grace period option, and employers are not obligated to offer either extension.

Employers should consider their options:

If you recently changed your plan documentation to allow for a carryover option, communicate to your employees about this feature before and during open enrollment. Employees may not be aware that they would be able to carry over up to $500 in unused FSA funds to the next year.

If choosing to keep the grace period option, emphasize in your benefit communications that employees should keep track of their plan-year deadlines and use their available balance during the year to avoid forfeiting FSA funds.

Educate employees about FSA-eligible expenses covered by their plan, including qualified medical services and medical products for themselves and their dependents, to reduce confusion and promote use of this benefit.

Offer an FSA debit card to lower the amount of paperwork participants must fill out for reimbursement.

Point employees to an online FSA calculator and other resources that will help them understand their account better.

Tips for Employees

Open enrollment communications are an opportunity to provide employees with the following pointers on FSA use:

Learn about plan extensions. Check if your FSA offers a carryover option or a grace period.

Keep track of deadlines. Be aware of how much you contribute to your FSA and how much you’ve spent per month by checking your account balance throughout the year.

Research eligible expenses. Read your plan guidelines to know what your FSA plan covers in terms of qualified products and services.

Calculate your contribution. Use an online FSA calculator to estimate yearly expenses and learn about the savings available to you through these plans. If you’re unsure about how much to set aside, go for a conservative estimate, but know that you can contribute up to $2,500 in pretax funds per FSA account.

Ask questions before open enrollment. Open enrollment can be stressful, but if you are well-equipped by understanding the plan, coverage and reimbursement policy, then enrolling will be a breeze.

In addition, here are some ways for employees to use their accounts that they may not be aware of:

Prep for warm weather travel with sunscreens and other FSA-eligible products.

Relieve muscle pain and keep moving with hot and cold packs.

Update a first-aid kit for your home, office or car.

Schedule annual dental and vision exams, and use your FSA to cover out-of-pocket expenses related to these visits.

Visit shrm.org for more information

New Rules for (Some) Flexible Spending Accounts

By Kimberly Lankford, June 30, 2014

I heard that employers can now let people roll over $500 in their medical flexible spending accounts to the next year, rather than lose it all at the end of the year. Do all plans let you do this?

No. FSA plans aren’t all required to let you roll over the $500, but many are changing their rules to permit the transfer starting this year.

The “use-it-or-lose-it” rule of flexible spending accounts was one of the biggest downsides to saving in these plans – if you didn’t use all of the money you set aside for eligible medical expenses by the end of the year, you’d lose it. Some plans added a grace period to let you use the money by March 15 of the following year, but anything remaining in the plan at that time would disappear.

But the U.S. Treasury Department changed the rules in 2013, permitting employers to amend their plans and allow employees to roll over up to $500 in the account from one year to the next. Employers aren’t required to make the change, and only 28% of the employers surveyed by Visa and WageWorks (which administers FSAs for employers) changed their rules to permit the rollover in 2013. Many employers opted instead to keep the March 15 grace period for the year, because a company can’t offer both the rollover and the grace period at the same time. But more employers plan to make the change this year – the Visa/WageWorks survey found that 53% of employers plan to offer an FSA with a carryover in 2014.

This is a good time of year to ask your employer about its rules for rollovers; if your employer hasn’t made the change, you still have plenty of time to use the money in the account. You can use FSA money tax-free for your deductible, co-payments, and medical and prescription drug expenses that aren’t covered by insurance--a good thing to keep in mind as you take your child to doctor and dentist appointments before school starts.

And you can use FSA money tax-free for a number of other summertime expenses, including prescription sunglasses, certain kinds of sunscreen, eligible anti-itch cream (for poison ivy and insect bites), first aid kits, and allergy and sinus medicine. You can also use the money for eyeglasses, contact lenses and lens solution, as well as frequently overlooked expenses such as prenatal vitamins, breast pumps, hot and cold packs, knee and ankle braces, thermometers, blood pressure monitors, vaporizers, heating pads and bandages, says Jeremy Miller, founder and CEO of FSA Store, which sells FSA-eligible items.

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5 Unique Ways to Spend FSA Dollars

With recent changes to the use-it-or-lose-it rule for flexible spending accounts – employers can now offer a carryover of up to $500 in funds or allow a two-and-a-half month grace period at the end of the year – FSAs may become a more appealing savings option for employees. Here’s what you need to know about the new rules, along with five lesser-known ways employees can spend their FSA dollars.

1. Rollover feature considerations

Employers need to choose between offering the rollover feature or the grace period; they cannot offer both. Look at your utilization and forfeiture data, advises Jeremy Miller, president and founder of FSAStore.com, an e-commerce site that sells FSA-eligible products. “If the employer feels, based on utilization and forfeitures, that their employees may benefit more and will see a higher enrollment from a carry forward, than they probably want to consider offering the rollover,” he says.

2. Grace period considerations

“If they have a plan in which they have historically offered a grace period, they have high enrollment rates and can see that employees use the majority of their funds in the first two and half months of the following year, it may be best for them and their employees to continue with a grace period,” says Miller.

3. Sunscreen

With the unofficial kick-off to summer behind us, employees can gear up for warmer weather with sunscreens and other FSA-eligible products for travel.

4. Allergy medication

Employees who suffer from allergies year-round can use FSA dollars toward over-the-counter allergy tablets and nasal solutions (prescription required.)

5. Hot and cold packs

If you have athletes in your workforce or employees who suffer from muscle and joint pain, hot and cold packs, knee and ankle braces, or heating pads can help manage their pain and keep them moving.

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For some with Flexible Spending Accounts, Time to Act

By ANN CARRNS, March 10, 2014

If you have a health care flexible spending account, it may be crunch time: The March 15 deadline to spend any available balance remaining is only days away.

Formally known as flexible spending arrangements, or F.S.A.s, the accounts help you save money by letting you defer pretax dollars to pay for expenses that are not covered by your health insurance, like co-payments or dental and eye-care expenses. About a quarter of people with private health insurance belong to a family that has an F.S.A. for medical expenses, according to the federal government.

Some employers set a deadline of Dec. 31 for using the funds in a flexible spending account, but tax rules allow companies to grant an optional two-and-a-half-month grace period, which many do. That means the final deadline for many employees to make an eligible purchase is Saturday; if you don’t spend down the balance by then, you’ll forfeit it to your employer.

There’s another wrinkle complicating F.S.A. deadlines this year, however. Late last year, the Treasury Department announced new rules, which allow companies to permit employees to carry over as much as $500 in F.S.A. balances remaining at the end of a plan year, for use the following year. Employers must choose between offering the carry-over option, or the grace period; they cannot offer both.

Companies were eligible to start allowing carry-overs immediately, and some did so; if your employer was one of them, that means you don’t have to rush to buy something by March 15 — one of the perks of the carry-over option.

However, because the new rules were announced late in the year, many companies didn’t adopt it right away for 2013 or for 2014. “Most employers couldn’t implement the change in time,” said Rich Stover, a principal with Buck Consultants, a human resources advisory firm.

Large companies, in particular, may have held off. Some employers, Mr. Stover said, are waiting for additional guidance from the government on whether allowing carry-overs for F.S.A.s interferes with the eligibility of employees to contribute to health savings accounts, another plan that lets workers use pretax dollars for health expenses. (H.S.A.s, which are becoming more prevalent, can be used in tandem with only certain high-deductible health plans.) Because of that complexity, he said, some companies will wait until 2015 to adopt the carry-over; others may choose not to adopt it at all, but will retain the grace period instead.

The new carry-over option has been adopted by some companies. Jody Dietel, chief compliance officer at WageWorks, a benefits management company, said more than a thousand of its clients, most of them smaller and midsize employers, enacted the carry-over provision for 2013, and more have adopted it for the 2014 plan year. “We expect it to be the norm for employers this year,” she said in an email.

If the March 15 deadline still applies, you may be wondering what items you can buy that are eligible for F.S.A. reimbursement. In general, items that are deductible as medical expenses on your taxes qualify for F.S.A. reimbursement. Some examples: If you’re expecting a baby, breast pumps are a popular item. Diagnostic equipment like thermometers and blood pressure monitors are eligible as well, as are first-aid items like cold packs and heating pads, according to FSA Store, an online health care retailer.

The FSA Store has created prepackaged bundles, in price brackets from $30 to $400, to help you spend your money on qualifying items. The bundles include packages organized around different categories, like baby care, sun care and pain relief.

Here are some additional questions about F.S.A.s:

How do I know if I can carry over a balance from last year in my flexible spending account?

It’s important to check with your human resources department to learn your company’s policy, said Mr. Stover of Buck Consultants. Don’t assume that you can carry over a balance from last year, since companies aren’t obligated to allow it.

Does the new $500 carry-over option change how much I can set aside in my F.S.A. each year?

No, according to WageWorks. If your employer adopts the new option, you can still set aside up to $2,500 a year, even if you carry over $500 from the year before; that means you can have a balance of up to $3,000 available in a given year.

If I have a health savings account, does the March 15 grace period deadline apply to that balance?

No. Any balance in your H.S.A. automatically rolls over each year; there’s no use-it-or-lose-it rule attached to those accounts.

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March Deadlines for Flexible Spending Accounts Still in Force

By Ashlea Ebeling, March 7, 2014

March is still the bewitching month for most employees who have healthcare flexible spending accounts. If you didn’t spend down your account in 2013, it’s now or never, thanks to the dreaded “use-it-or-lose-it” rule. That rule–it’s still in effect at most employers—means employees forfeit unused money in these accounts.

It’s true that some employees get a break. That’s because last fall the Treasury Dept. modified the “use-it-or-lose-it” rule to allow employees to carry over $500 of unused money into the next plan year. The catch: your employer has to officially change its plan rules for the $500 carry over to apply to you. Some employers did immediately adopt the new rule for 2013. If your employer didn’t, you’re stuck with the old rules.

Here are the basics that apply whether or not your employer has adopted the new rules: on an annual basis you can divert up to $2,500 of pre-tax salary into an account to pay out-of-pocket healthcare expenses like co-pays, deductibles, and orthodontia. The lure is tax savings. If you divert $2,500 and your combined federal/state income tax rate is 40%, that’s $1,000 in savings.

About three-quarters of employers have adopted a grace period that allows up to 2.5 months (March 15 for a calendar year plan) during which you can incur new expenses and be reimbursed from prior year funds. So if you have 2013 money left in your account, you can still buy stuff and get reimbursed for it through March 15, spending down your balance. FSAstore.com, CVS and Walgreens all alert consumers about the March 15 spend-down deadline.

The problem Treasury tried to address is that about a third of employees forfeit money each year, with the average forfeiture around $120 to $130, according to WageWorks WAGE +1.02%, an employee benefits administrator. The $500 carry over will help reduce forfeitures, and encourage employees to sign up who didn’t use the accounts for fear of losing money.

If your employer has added the $500 carry over, it has to delete any grace period. So instead of the March 15 grace period deadline for spending down the entire balance, you have to check your balance at year-end to make sure that you don’t have more than $500 left.

To add to the confusion, your plan might also have a March 31 deadline. For calendar year plans, many have a run-out period – that’s a period of time during the following plan year when you can submit expenses incurred during the plan year and be reimbursed. Common deadlines for submitting claims for the prior year are March 31, April 30 and May 31; your employer sets this deadline.

If you use a CVS Caremark CVS +0.74% extracare loyalty card, you can get a printout showing all your FSA eligible purchases (sunscreen with SPF 15 or greater, for example) for last year and use that for reimbursements.

Wondering what’s an FSA eligible expense? WageWorks has a comprehensive list here showing what counts under a standard FSA and a limited-purpose FSA (for employees who also have a health savings account).

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Navigating New rules for Flexible Spending Accounts

By Kimberly Lankford, February 14, 2014

I read in your column a few months ago that some people can now carry over $500 from their flexible-spending accounts after the deadline for spending the money. Do I still have to use up last year’s money in my account by March 15?

That’s up to your employer. The Treasury Department and IRS changed the rules last fall, and employers can now allow their employees to carry over up to $500 in their FSA from one year to the next. Under the old rules, you lost any money left in the account after the deadline on December 31 -- or March 15, for plans that offer a grace period. Employers can’t offer both the $500 rollover and the March 15 grace period, so if your employer does change to the new rules, you will lose the option of carrying over your entire unused balance until March 15. But you will be able to carry over up to $500 into the next plan year without losing it if you don’t spend it by December 31.

But employers aren’t required to make the change, and some are waiting to switch to the new rules. That means you may still have until March 15 to use the 2013 money. In a survey of FSA administrators by FSAstore.com, an online store stocked with FSA-eligible products, 51% say that the employers they work with are leaning toward adopting the carryover option, but 64% believe most employers will wait until later in 2014 to amend their FSA plans. Ask your employer if you still have until March 15 to use FSA money this year, and find out whether the company plans to switch to the $500 carryover without the grace period for next year.

If your employer does still offer the March 15 grace period, this can be your last opportunity to take advantage of a sweet spot for FSAs. During the first two and a half months of the year, you can use any money remaining in your account from 2013 -- and you can use all of the money you signed up to contribute for 2014, too, even though you haven’t made all the contributions yet. That makes it a good time to consider some big-ticket medical expenses that aren’t covered by insurance, such as lasik surgery or orthodontia. It can also be a good time to visit the eye doctor, dentist, chiropractor or acupuncturist.

You also have plenty of smaller ways to clean out your 2013 balance by March 15 : You can use the money for insurance deductibles, co-payments, and medical and prescription drug expenses that aren’t covered by insurance (but not for over-the-counter drugs without a prescription). You can also use the money for eyeglasses, prescription sunglasses, contact lenses and lens solution. FSAstore.com also points out some frequently overlooked expenses that qualify for FSA payouts: prenatal vitamins, breast pumps, hot and cold packs, knee and ankle braces, thermometers, blood pressure monitors, vaporizers, heating pads, pregnancy test kits, bandages, first-aid kits, and even some sunscreens. You can also get acne medicine, antacids and allergy medicine with a doctor’s prescription. For more ideas, see Smart Uses for Your Flex-Account Money.

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Healthy Living - 10 Ways to Spend Your FSA Before it Disappears

By Susan Matthews, Everyday Health Staff Writer

If you’re one of the 14 million American families that use a flexible spending account (FSA) — an account where you can place tax-free dollars to pay for medical expenses — you might think that when the ball dropped on New Year’s Eve you also lost whatever remaining money hadn’t been spent in your account. Luckily, the United States Department of the Treasury has your back. Previously, the Treasury mandated that any costs incurred in the two and a half months following the end of the year could retroactively be applied to the former FSA balance. In October 2013, they also mandated that $500 of the remaining balance would be allowed to roll over to this year’s account.

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Make Sure Your Flexible Spending Account Dollars End Up in Your Pocket, Not Your Employer’s

Every paycheck, approximately 35 million employees set aside pre-tax dollars in their flexible spending accounts (FSA). If you're in the 30 percent tax bracket, that means you can save $30 on every $100 you put in your FSA. The FSA funds pay for healthcare expenses not covered by an employee's insurance plan. But often those savings aren't realized because employees who participate in FSAs don't spend their hard-earned pre-tax dollars in time.

Recognizing that too many people are confused by how their FSA plans work, a Columbia Business School M.B.A. student, Jeremy Miller, vowed to make the FSA process customer-friendly. In 2010, he launched FSAstore.com.

FSAstore.com is an easy-to-navigate site that features thousands of FSA-eligible products that you can purchase with your FSA debit card or any major credit card. These FSA-eligible products include bandages, blood pressure monitors, breast pumps, cold and allergy items, contact lens solutions, diabetes care items, multivitamins, and thermometers.

About FSAstore.com

FSAstore.com is the only one-stop-shop exclusively stocked with FSA eligible products - eliminating the guesswork behind what is reimbursable by an FSA. Consumers with flexible spending accounts can access thousands of high quality FSA eligible products, in addition to FSA eligible services, and much-needed information through the FSA Learning Center. FSAstore.com accepts all FSA and major credit cards, offers 24/7 customer service, one-to-two-day turnaround for all orders, and free shipping on orders $50+. There is no need to submit receipts for products purchased with an FSA or HSA card.

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FSAstore.com Reminds Consumers to Take Advantage of Online Purchasing Using Flexible Spending Accounts That Might Expire on June 30

Each Year Consumers Forfeit Millions of Dollars in Spending Coverage That Can Be Used to Purchase Thousands of Health Products Including Sunscreen, Bandages, and Breast Pumps

NEW YORK, NY--(Marketwired - Jun 28, 2013) - FSAstore.com, the only e-commerce site stocked exclusively with Flexible Spending Account (FSA) and Health Savings Account (HSA) eligible products and services, is reminding consumers with an FSA that they can make immediate purchases of a wide range of health products online. Online shopping for FSA-covered products available at FSAstore.com can help consumers avoid forfeiting FSA funds that might expire with an approaching plan deadline on June 30. Flexible Spending Accounts are employer-based programs that allow participants to use tax-free income on eligible healthcare products and medical services.

Many companies and institutions that are on fiscal years ending on June 30th might have a deadline to spend their FSA funds by that date. Any funds not used are forfeited if there is no Grace Period offered. Each year, consumers forfeit hundreds of millions of dollars that can be used to purchase essential health products because they do not deplete the funds available in their FSA account by their respective deadline.

Consumers may not realize that FSA and HSA funds can be used to purchase a wide range of health products including sunscreen. According to the Skin Cancer Foundation, there are nearly two million cases of skin cancer each year. Sunscreen is considered an FSA-eligible expense when it has at least SPF 15 and protects against both ultraviolet B (UVB) radiation and ultraviolet A (UVA) radiation. Unlike some other OTC products, sunscreen does not require a prescription for reimbursement. FSAstore.com offers a wide selection of brand-name sun care products including Aveeno, BabyGanics, BananaBoat, Coppertone, L'Oreal, Nature's Gate and Neutrogena. In addition to sunscreen, FSA plans make it possible for consumers to buy thousands of different products including bandages, breast pumps, and thermometers.

"Sunscreen is just one of the many products that people do not realize they can purchase instantly and easily online using FSA spending accounts. Sunscreen is a fairly new addition to the eligible products list," said Azar Gurbanov, FSAstore.com's chief operating officer. "Since FSAstore.com only carries eligible items, there is never confusion about product eligibility -- and even last minute shoppers can make sure that they use all of the funding that is available to them through their FSA accounts."

About FSAstore.com

FSAstore.com is the only one-stop-shop exclusively stocked with FSA eligible products - eliminating the guesswork behind what is reimbursable by an FSA. Consumers with flexible spending accounts can access thousands of high quality FSA eligible products, in addition to FSA eligible services, and much-needed information through the FSA Learning Center. FSAstore.com accepts all FSA and major credit cards, offers 24/7 customer service, one-to-two-day turnaround for all orders, and free shipping on orders $50+. There is no need to submit receipts for products purchased with an FSA or HSA card.

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Delivering the perfect pitch

Startups flock to business-plan competitions to win cash and publicity.

By Lori Ioannou

JEREMY MILLER. Recognizing a need to help the 30 million U.S. consumers with flexible spending accounts manage their money, Mr. Miller came up with FSAStore.com, a business idea pitched at Columbia's Outrageous Business Plan Competition in 2009 that won second place. The following year he entered and won the school's Odyssey Competition. Since then, the company has closed two rounds of venture capital totaling $2.8 million and partnered with more than 100 FSA administrators. It now has more than 50,000 customers and forecasts a tripling of its seven-digit revenues by year's end. The key to success, he says, was the unbiased feedback from judges, potential investors and entrepreneurs who attended the event.

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Last-Minute Ideas to Beat the Flexible Spending Account Deadline

If your employer gives you until March 15 to use last year’s funds, don’t leave money on the table.

By Kimberly Lankford

I still have money in my flexible-spending account from 2012, and I need to spend it by March 15, 2013, or I’ll lose it. What are some last-minute ways to spend FSA money, other than on insurance co-payments and deductibles?

A number of employers give workers until March 15, 2013, to use up the money in their flexible-spending account left over from 2012. Here are a few ideas to clear out that money from the account in the next couple of weeks. You can use the FSA money for yourself, your spouse or any dependents (including adult children up to age 26, even if they aren’t included on your health insurance policy).

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Flexible Spending Accounts, Decoded

Find out why you should be enrolling in your flexible spending account, and get answers to the three most common concerns.

They come with the promise of "free money," and they're a cinch to sign up for (just contact your employer's benefits department). But the vast majority of workers—as many as four out of five, according to a recent survey—pass up their company's flexible spending accounts (FSAs) mainly because they don't understand their tax benefits. And that's a shame: Although FSAs reduce your take-home pay, they save you money in the long term. Those pretax dollars can cover many out-of-pocket costs, including doctor visits, child care, and transportation expenses. Here are three of the most common worries about FSAs—and how to put them to rest.

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Use Your Flexible Spending Account Funds Before It’s Too Late

By Ashley Tate

The frenzy of the holidays is over, so now is the time to make sure that you haven’t overlooked using all the money in your flexible spending account (FSA).

FSAs let you set aside pre-tax dollars to pay for medical expenses that your health insurance doesn’t cover (like bandages, prescription drugs, and meeting your deductible).While these accounts are great for consumers, they have a downside: If you don’t spend all your FSA money by December 31, you lose it. (Some employers offer a grace period, so check with yours for plan specifics.)

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13 ways to save money in 2013

By Susan Tompor

Thirteen might not be the luckiest of numbers but 2013 could be a pretty good year to get on a better financial footing — if you’re not fussy.

Now 2013 is the year I will finally use a 1991 calendar. While cleaning, I found a Laura Ashley desk calendar that was too pretty to use back then. The days of the week for 1991 match up with 2013. Now, 13 other tips for ‘13:

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Deadline to spend health care FSA funds

By Kathleen Pender

Deadline alert: Many workers who have contributed to a flexible spending account for health care have until Dec. 31 to spend the money or forfeit it to their employers.

The law allows, but does not require, employers to give workers an extra 2.5 months to spend the money - or until March 15 for plan years that end Dec. 31 - and some do.

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Time's Running Out On Your Flexible Spending Account: How To Get Your Money's Worth

By Korky Vann

By the end of the year, most of us are shopped out. But for those of us with Flexible Spending Accounts, there are more purchases to be made before Dec. 31.

Close to 35 million Americans have Flexible Spending Accounts (FSAs) as part of their medical benefits. (The accounts let employees set aside pre-tax money from their paychecks to spend on healthcare expenses not covered by insurance policies.) When you have a qualified health cost, you can pay for it with the pre-tax dollars in your FSA.

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Savage: Money strategies to use before year ends

By TERRY SAVAGE

You’re busy with holiday shopping and parties, so you don’t give much of a thought to your finances at year end. But here are a few tips that could save you real money if you pay just a bit of attention before year-end.

Use it or lose it

You would never walk by a $10 bill lying on the sidewalk. But millions of Americans will leave an average of $138 on the table, simply by not using the total amount available in their Flexible Spending Account at work.

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Tips on how to use your Flexible Spending Account

Most Flexible Spending Accounts have rules that all the money must be used or it will be forfeited.

By JULIE LANDRY LAVIOLETTE

By this time of year, Libby Winslow usually doesn’t have a penny left in her healthcare Flexible Spending Account. But this year, she has been so busy at her Miami accounting firm job that she has put off some annual check-ups and doctor visits. Now Winslow has $300 to $400 left of her Flexible Spending Account money to spend by year’s end, or she will lose it.

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Changes to Your 2013 FSA Account

By Lisa Zamosky

Flexible Spending Accounts, or FSAs, are offered as an employee benefit, and allow you to set aside pre-tax salary dollars to pay for medical expenses, such as deductibles, co-pays, dental treatment, and medical treatments not covered by insurance.

A requirement of these accounts is that you decide at the time of enrollment how much money you’ll set aside for the year. FSA money must be spent within the benefit year or the funds are forfeited. Most companies, however, do offer an extension period, which can stretch until mid-March (check with your plan administrator to learn how much time you have to exhaust your account).

As a result of the Affordable Care Act, FSAs will undergo a series of changes, some of which have already occurred, and others that are about to take effect this upcoming January.

If you still have time to decide how much money to commit to your FSA account for 2013, some of these changes should factor into your plans.

No more OTC drugs. Many people in the past have used FSA funds to purchase over-the-counter-medications, such as Tylenol or Sudafed. Starting last year, the money is no longer allowed to be used for that purpose, unless your doctor writes you a prescription.

Limits to FSA contributions: Currently, the maximum amount of money you’re allowed to set aside in your FSA has been dictated by your employer. Most cap employee contributions at a maximum of $5,000. That’s changing.

Starting in January, 2013, the health reform law will limit your contribution to $2,500 per year.

No need for preventive care costs: Under the Affordable Care Act, preventive health care services, such as annual checkups, mammograms and colonoscopies, are available to most people with no out-of-pocket costs. If you’re accustomed to factoring in the cost of these services when deciding how much to put into your FSA account, you’ll want to recalculate.

Contraceptives: The same is true of contraceptives. Although there are exceptions being made for employers with a religious affiliation, most employer health plans are now required to cover the full cost of contraceptives.

Starting in 2013, there’s no longer the need to set aside money to cover the cost of your birth control pills.

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Money Still in Your Flexible Spending Account? Use It or Lose It

Know what’s eligible for reimbursement before developing a spending plan

By SUSAN JOHNSTON

As the year draws to a close, many employees with a flexible spending account (FSA) for medical expenses will rush to the doctor or dentist to use up any remaining funds. For the uninitiated, FSAs allow employees to set aside pre-tax money to pay for qualified medical expenses, but at the end of the plan year—or two-and-a-half months into the following year, if the employer offers a grace period for FSAs—the employee forfeits any money left in the account. However, money in health savings accounts (HSAs) carries over from year to year.

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Staying smart about end-of-year healthcare

Keep on top of enrollment and using healthcare benefits to full advantage. Here are end-of-year tips.

By Lisa Zamosky

November is one of the most important months for health benefits. And it's now more than half over.

This month is a time of open enrollment, when many workers sign up for next year's health insurance. Deadlines are a big deal, and you don't want to miss one.

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FSAstore.com plots expansion course Oct 11, 2012

New funding will make it even easier for consumers to spend those pre-tax dollars. But first the company is going on a hiring spree.

By Cara S. Trager

FSAstore.com, an e-commerce startup featuring items and medical services that can be bought using pre-tax money from flexible spending accounts, is in the midst of a whirlwind expansion fueled by investor cash.

The $2 million in second-round financing the garment district-based company snagged this summer will help boost sales and marketing. Founder and President Jeremy Miller said it's slated to "quadruple" revenue this year over 2011, though he declined to provide figures.

The company claims to be the only website exclusively stocked with FSA-eligible products, eliminating the confusion over whether an item can be reimbursed with pre-tax wages. The site's Learning Center also provides updated information about the often confusing benefit.

Mr. Miller began researching the FSA benefit as a business opportunity while pursuing an MBA at Columbia Business School. He launched the two-and-half-year-old firm a month after graduation.

The latest round of financing is helping the company ramp up. It has created an onsite calculator to help consumers estimate how much money to allocate to their accounts. The 11-employee firm has also added 400 new products, including breast-feeding supplies. Another 250 items will become available next week, bringing the firm's offerings to around 6,000 FSA-eligible products, in addition to FSA-eligible services, such as acupuncture and Lasik eye surgery.

While consumers with flexible-spending accounts can set aside pre-tax dollars to purchase health care products, a change enacted in 2011 as part of health care reform requires FSA holders to get doctors' prescriptions if they want to be reimbursed for over-the-counter medicines like Tylenol and cough syrup.

Also, FSA plans that begin next year will be capped at $2,500 per individual. Currently, there are no government limits for FSAs, although many employers limit employees contributions to $5,000, said Mr. Miller.

The firm, he said, is "actively interviewing" for a chief compliance officer, director of sales and business development, director of Internet marketing, a staff accountant and two customer service professionals. A content writer, responsible for updating the Learning Center, will join the company next week.

Originate Ventures led the $2 million second round of financing, which also included funding from previous investors Point Judith Capital and Columbia Business School Lang Fund.

Glen Bressner, managing partner at Originate Ventures, said FSAstore.com was an "authoritative voice in helping consumers understand what they can purchase and how they can use these dollars for normal, recurring purchases." He also said FSAstore.com benefits from partnerships with third-party FSA administrators that promote the site to their account holders.

Despite the limits that are going to be placed on new FSA plans in 2013, Mr. Bressner said that "there is still a fair amount of purchasing power" in consumers' hands.

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FSAStore Raises Series B Venture Capital Oct 10, 2012

New York, New York -- E-Commerce technology company FSAStore.com has secured $2 million in its second round of institutional venture capital investment.

FSAStore.com operates an online site that is exclusively stocked with FSA (Flexible Spending Account) eligible products and services.

Originate Ventures led the round, which also included Point Judith Capital Partners and others.

The company said it would use the funding to accelerate sales, marketing and development initiatives.

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Crain's Health Pulse Newsletter Oct 10, 2012

At A Glance

CAPITAL: FSAstore.com, a Manhattan e-commerce site that exclusively stocks products and services that are eligible to tap Flexible Spending Accounts, closed on a second round of financing. The $2 million in new capital was led by Bethlehem, Pa.-based Originate Ventures, with money from previous investors Point Judith Capital and Columbia Business School Lang Fund, and from additional angel investors.

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Venture Capital Deals Oct 9, 2012

By Dan Primack

FSAstore.com, a New York-based ecommerce site for flexible spending account-eligible products and services, has raised more than $2 million in second-round funding. Originate Ventures led the round, and was joined by return backers Point Judith Capital and Columbia Business School Lang Fund

Visit Fortune/CNNMoney.com  for more information

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FSAstore.com Closes More Than $2M for FSA-Eligible Products Oct 9, 2012

FSA Store Inc ., provider of the website FSAstore.com which sells flexible-spending-account-eligible products and services, said it closed a second round of financing of more than $2 million led by Originate Ventures, which the company plans to use for sales, marketing and development initiatives.

The round includes previous investors Point Judith Capital, the Eugene M. Lang Entrepreneurial Initiative Fund affiliated with Columbia Business School, and additional angel investors, the New York company said in a news release.

Visit Dow Jones Venture Wire  for more information

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Newsday.com Dec 5, 2011

Money Fix: Unlock your FSA funds
By CHRISTINE GIORDANO

There are plenty of ways to spend down a Flexible Spending Accounts -- the program allowing employees to pay medical and some other costs with pretax dollars -- but do it fast. If an FSA expires Dec. 31 (some expire in March), unspent money goes back to the employer.

To Start. Get your annual checkup, body scan or mammogram. Then make sure to get a "letter of medical necessity" from your doctor for any items you need, said Dr. Abbie Leibowitz, co-founder of Health Advocate Inc. Even mattress covers and air purifiers to prevent allergies may qualify, she said.

"Most people don't realize the breadth of products that are FSA-eligible . . . diaper cream, sunblock, Band-Aids," said Maria Tenaglia of FSAstore.com, which offers FSA items and calls your doctor for prescriptions when needed.

Vision and Teeth may include corrective vision surgery and contact lenses as well as dental checkups, false teeth and cleanings, according to Bart Turney, director of FSA Marketing, for SHPS, a third-party administrator of FSA accounts.

Tutoring services for learning-disabled children may qualify. Also: lead paint removal and radon remediation.

Quit It. Inpatient treatment for alcohol dependency, transportation for AA and stop-smoking programs may qualify if they are prescribed.

Aids: Hearing aids, phones for the hearing-impaired, prescription medicines, nursing care, wheelchairs and even bathroom railings may also qualify.

Always double-check with your plan administrator to see if items qualify, Leibowitz said.

Visit http://www.newsday.com/columnists/glenn-gamboa/2.1091/money-fix-unlock-your-fsa-funds-1.3362603?qr=1  for more information

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NYTimes.com Oct 31, 2011

Some Help Getting Reimbursed for OTC Drugs
By ANN CARRNS

New I.R.S. rules that went into effect this year, as part of the Affordable Care Act, made it harder for consumers to have non-prescription medicines reimbursed from health-care flexible spending accounts.

To be reimbursed for over-the-counter medicines, consumers now must obtain a prescription for the items—even though a prescription isn’t required to buy them in the first place.

The change has meant that customers whose employers provide them a dedicated debit card linked to their flexible spending accounts can’t use them to buy over-the-counter items, unless they get a prescription first. They then usually have to submit the prescription along with the receipt, to obtain the reimbursement. The rules apply to medicines like allergy pills, cough syrup, antibiotic ointment or ibuprofen (insulin, however, is exempt).

Flexible spending accounts let workers set aside pre-tax dollars from their paychecks to help pay for medical needs not covered by their health insurance. (The rules also apply to health savings accounts, another tax-savings vehicle).

In some cases, if the doctor knows the patient and has been treating him or her for a while, the physician may not mind providing the patient a written prescription for an over-the-counter drug, said Dr. Glen Stream, president of the American Academy of Family Physicians. In other cases, though, a doctor might want to see the patient in person before writing a prescription—which adds inconvenience and cost for the patient. “I think there is a lot of variability,” said Dr. Stream.

The whole thing has gotten so complicated that many employees appear to have given up seeking reimbursement for OTC medicines (possibly the whole point in the first place, since tax revenue increases for the government if people put less in their accounts in anticipation of not using that extra money for OTC medications).

Aon Hewitt, a large administrator of flexible spending accounts, has seen a 90 percent drop in requests for reimbursement for OTC items, says Craig Rosenberg, the firm’s national practice leader for health benefits administration. (The full impact won’t be entirely clear until after the end of the year, however, because some employees — especially those who don’t have dedicated FSA debit cards — save up their receipts and submit them all at once for reimbursement, and there’s usually a grace period after the end of the calendar year.)

FSAStore.com, an online store that sells only FSA-eligible items, has seen its sales of items affected by the eligibility change plummet because of the hassle of getting a prescription, said Maria Tenaglia, a spokeswoman for the FSAStore.com. (She said the site’s overall sales remain strong overall, however, since thousands of other OTC items, like blood pressure kits, still don’t require a prescription.)

To address the problem, FSAStore.com is offering a way to reduce the reimbursement hassle for patients. Customers with FSA debit cards can shop as usual at the online store, Ms. Tenaglia said. When they go to checkout, FSAStore.com will automatically flag items that now require a prescription.

If the customer provides their doctor’s contact information, fsastore.com has teamed up with Wellpartner, a pharmacy services firm, to contact the physician’s office to obtain the prescription for processing. That way, the patient doesn’t have to deal with any paperwork. (A sample of the form sent to doctors’ offices notes that the patient is requesting a prescription for an over-the-counter item for FSA purposes). A request from Wellpartner, Ms. Tenaglia said in an e-mail, is no different from a request from a retail pharmacy: “They are experienced in communicating with physicians on pharmacy fulfillment.” She added that so far there have been “no issues” with the service.

If customers prefer, they can call the doctor themselves and have the prescription faxed or e-mailed. (The option to have FSAStore.com call your doctors isn’t available, though, if you lack a dedicated FSA debit card; in that case, you have to pay for the items, then submit a receipt and prescription manually to your claims administrator).

You can read more about the service here.

Have you tried to obtain reimbursement for OTC medicine? What was your experience?

Visit http://www.bucks.blogs.nytimes.com/2011/10/31/some-help-getting-reimbursed-for-otc-drugs  for more information

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MarketWatch Oct 21, 2011

Flexible-Spending Accounts: Worth the Hassle?
By AnnaMaria Andriotis

As workers pick their health-care benefits over the next few weeks, experts say one option is looking less popular this year: flexible-savings accounts. SmartMoney's AnnaMaria Andriotis explains why on Lunch Break.

Visit http://www.marketwatch.com/video/asset/flexible-spending-accounts-worth-the-hassle-2011-10-21/EE6B686F-3866-4169-8A30-A859650F09EA#!EE6B686F-3866-4169-8A30-A859650F09EA  for more information

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ShopSmart July 18, 2011

Make sure you're tracking your FSA account
By Sandra Gordon

The middle of the year is a good time to step back and take stock of where you and your finances are so you will have a sense of where you’ll end up. If you have a flexible spending account (FSA), for instance, which lets you set aside pre-tax dollars from your paycheck to spend on healthcare expenses—from bandages to smoking-cessation products to co-payments, deductibles, and co-insurance—that aren’t covered by your insurance policy, it’s a good time to check in on it.

And if you have trouble, like I do, figuring out what products count toward my FSA money, check out fsastore.com. The e-commerce site is stocked exclusively with products that are FSA-eligible, which takes the guesswork out of figuring that out for yourself.

As you may know, FSAs are use-it-or-lose it accounts. You have to use all the funds you set aside for the account, which is up to $5,000 in most states, each year. FSAstore.com estimates that consumers collectively forfeited over $400 million back to employers in 2010 because they didn’t deplete their FSAs. Ouch! The FSAstore.com can help you avoid leaving money on the table. Besides the convenience of shopping online, you can also use it as a benchmark for determining what’s FSA eligible, even if you ultimately decide to shop at your corner drugstore or elsewhere on the Web because you’ve found a better deal.

It’s a reference for FSA-eligible services as well. According to the site, acupuncture and LASIK services are reimbursable by FSA, for example, but acid peels aren’t. Its “Learning Center” can also answer common questions you may have about FSAs, such as how much you should put into your account each year. The answer, as you might expect, depends on how much you’ll spend on health costs in the coming year so do the math, penciling out your possible FSA-eligible medical expenses, and use your FSA account whenever possible.

Visit http://www.shopsmartmag.org/2011/07/make-sure-youre-tracking-your-fsa-account.html for more information

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About.com July 8, 2011

Columbia Business School Proves Fertile Ground for Health-Care Startup
Leveraging University Resources to Get Out of the Gates Fast
By Mitchell York

Some people go to business school to get their ticket punched before heading to Wall Street or a big accounting firm. Others go with something more specific in mind -- as Jeremy Miller did.

Miller, 32, graduated from Columbia Business School (full disclosure -- so did I) in May 2010, but it's how he entered the school that's interesting. For the previous eight years, Miller worked as operations manager for Gehry Technologies Inc., the unit of mega-architect Frank Gehry's company that specializes in 3D architectural modeling. Miller handled a variety of responsibilities, including IT, HR and finance. As part of his job, he created a Flexible Spending Account (FSA) plan for the company. He found during the process of setting up the plan that participants were confused about how to use their plans, and he started thinking about how the FSA process could be more efficient. That led to contemplating doing his own startup, perhaps having something to do with FSA plans. He then applied to Columbia's MBA program to get some entrepreneurial training.

What Miller got was more than training.

"I embraced the school and took all they were offering," Miller said. The school's entrepreneurship program incubated the startup he conceived while an MBA student, FSAStore.com, granting it $25,000 in seed capital. That's not a lot of money, admittedly. But "it was the best spent money we had. We did a lot with it." That included attending a conference of FSA administrators (companies that help employers set up FSA programs for their workers) and building its first website. Miller then secured the company's first angel investor round of financing from Opal Moon LLC., which found out about the company through the school's Entrepreneurial Greenhouse Program, And in May 2011, the company received $800,000 in venture capital financing from Point Judith Capital.

Miller said 35 million Americans are covered by flexible spending accounts, which allow them to purchase thousands of healthcare products and services with pre-tax income. The inefficiency in the FSA model is that the accounts are use-it-or-lose-it: when the funds are not used by year-end they are usually forfeited back to employers. This amounts to hundreds of millions of dollars a year that consumers leave on the table -- $400 million in 2010 alone, Miller estimates.

The 8-employee company has about 5,000 registered users so far. The fly in the ointment now, so to speak, is being involved in a fast-changing part of the health care delivery market. In 2013, there will be a cap of $2500 on FSAs, compared with the current system of letting employers set their own cap. FSAStore.com helps its customers keep abreast of the changing landscape with extensive FAQs.

In addition to the grants and investments from Columbia, Miller also admits to hanging around after graduating and squatting in an unused conference room in Warren Hall -- and even to sneaking a few meals when food was free on Fridays. He stayed until they disconnected the phone line he was using. Now the company has offices in midtown Manhattan.

Visit http://entrepreneurs.about.com/od/entrepreneursinaction/a/Columbia-Business-School-Proves-Fertile-Ground-For-Startup.htm for more information

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Crain's new york business July 5, 2011

Startup simplifies flexible spending accounts
By Cara S. Trager

Jeremy Miller’s research into flexible spending accounts drove him to make FSAs the centerpiece of his M.B.A. studies at Columbia University’s business school five years ago. FSAs allow workers to put aside pretax money from their wages each year to pay for health care products and services not covered by insurance policies.

Last year, Mr. Miller decided to capitalize on what he learned, launching FSAStore.com, an e-commerce site in Manhattan devoted solely to FSA-eligible items and services. The online hub features thousands of FSA-eligible products that it ships to customers within two to three days. It also lists a roster of 300,000 health care professionals, from acupuncturists to dentists, indicating which of their services are and aren’t FSA-eligible.

With 35 million Americans covered by flexible spending accounts—in which they lose money they don’t use by the end of the year, and thus are eager to drain—investors are paying attention. FSAStore.com garnered $800,000 in venture financing last May from an investor group led by Point Judith Capital, after securing about $125,000 in startup capital, including $60,000 from Menlo Park, Calif.-based angel investment fund Opal Moon, $25,000 from Columbia’s Eugene M. Lang Entrepreneurial Initiative Fund, and the remainder from family and friends.

David Martirano, co-founder and general partner at Point Judith Capital, said the “very confusing” environment surrounding FSAs provides FSAStore.com—as an exclusive purveyor of FSA-eligible products—with a “huge opportunity” to educate its customers and help them manage their FSAs.

FSAStore.com has so far attracted more than 5,000 registered users across the country, including 500 in New York. To help consumers make the most of the site, Mr. Miller has posted up-to-the-minute details about rules governing the spending benefit, including a thorny law that was enacted this year as part of health care reform. It requires FSA holders to get doctors’ prescriptions for over-the-counter items like Tylenol for reimbursement, and it makes paying for these OTC products with a debit card a multi-step process.

Therein lies a key challenge confronting the seven-employee firm—government regulation that may discourage people from using FSAs. “It seems that government is slowly, or not so slowly, strangling [Mr. Miller’s] business,” said Ira Davidson, director of Pace University’s Small Business Development Center.

Adding insult to injury, the new health care law places a $2,500 cap on health care FSAs in 2013; currently, employers are allowed to set the maximum annual savings for workers. According to J.D. Piro, principal and national practice leader with Aon Hewitt’s Health & Benefits Legal Practice, the average FSA held $1,460 last year, and account holders are tapping them to the greatest extent possible. “People are tending to cash out these accounts” because of the recession, he said.

Since last November, FSAStore.com has tweaked its website at least a half-dozen times to help account holders navigate the complicated benefit. It has, for instance, added color-coded icons that distinguish between FSA-eligible items and FSA-eligible medications that require a prescription, as well as a feature that enables customers to purchase both prescription and nonprescription items in one transaction but to pay with different FSA-permissible cards. “We cater to the account holder, making it simpler to use these accounts,” said Mr. Miller.

To keep his technology on the cutting edge, Mr. Miller recruited Azar Gurbanov, a classmate from Columbia who co-founded a telecom company in his native Azerbaijan, as a business partner and the firm’s chief operating officer.

So far, the startup has benefited from revenue-sharing partnerships with FSA-compliance administration companies that promote FSAStore.com to their account holders. FSAStore.com is on track to generate seven-digit revenues this year from both selling products and carrying ads for services such as Lasik surgery on its site, said Mr. Miller. To keep growing, however, he faces a formidable challenge: Continuing to outrun government regulations.

Visit http://www.crainsnewyork.com/article/20110705/SMALLBIZ/110639998 for more information

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Agent's Sales Journal

After Open Enrollment: 5 Tips to Help Employees Wisely Use Their Benefits
By Nancy Sansom

Open Enrollment is one of the busiest times of the year for HR professionals and often an overwhelming period for employees, too. During this time, employees are inundated with complex benefits information, urged to complete the enrollment process on deadline and then reengaged if any information is inaccurately submitted. Worse, after receiving an abundance of information during Open Enrollment, employees are often left on their own to decipher how to properly use their elected benefits package over the coming year.

According to a report by Hewitt Associates, employer health care costs are expected to increase 9 percent in 2011, the highest level in five years. As health care costs continue to increase, both agents and employers must play an active role in reducing overall benefit expenses. Encouraging employees to make financially smart decisions while promoting a healthy lifestyle can significantly reduce both employee and employer health care expenses.

Communication is key

Maintaining constant communication with employees after Open Enrollment is a crucial and sometimes overlooked step in the benefits process. Making smart decisions requires education. Communicating these top five tips to employees throughout the entire year will reduce out-of-pocket expenses, resulting in satisfied and healthier employees.

1. Understand your benefits coverage.
After employees complete Open Enrollment, they need to know how to use their benefits over the coming year. According to MetLife's 9th Annual Study of Employee Benefits Trends, only 45 percent of all employees find their benefits materials to be clear and comprehensive. Employees cannot make smart health care decisions if they do not understand their benefits.
Agents and employers must consistently communicate plan details with clear, concise information throughout the year. Inform employees which doctors are in-network and out-of-network, how to enroll in prescription drug plans and how much medical treatments will cost. For example, reminding employees that emergency room visits are very costly and should only be used in an emergency will help them decide if an urgent care doctor is a better choice for their emergency care. Proactively educating employees about their plan details will reduce employee out-of-pocket expenses.

2. Use FSA and HSA contributions.
According to FSAStore.com, more than 35 million consumers contribute to flexible spending accounts and yet almost $450 million goes unused each year. Unused contributions are lost if not spent by year-end. Reminding employees throughout the year that more than 24,000 products, ranging from family planning to first aid, that are eligible for FSA funding will help reduce this number.
Unlike FSAs, health savings accounts do not expire and the funds belong to the employee. HSAs provide a tax-advantage to employees enrolled in a High Deductible Health Plan and allow employees to accumulate funds from year to year. Remind employees that they can utilize these funds for all qualified expenses.

Enroll in wellness programs.
Participating in a wellness program helps employees manage their health and ultimately reduce their out-of-pocket expenses by living a fit lifestyle. Approximately 80–90 percent of large corporations in the U.S. offer employees a wellness program, according to the Wellness Councils of America. Providing a wellness program, and even rewarding employees for their participation, helps employers reach overall health and fitness goals. Subsidized gym memberships, for example, are a great option. If your company does not offer wellness programs, encourage employees to seek healthy lifestyle options outside the workplace.

Participate in preventive care.
An August 2010 survey by the Midwest Business Group on Health found that 88 percent of workers lack an understanding of the value of preventive services and 56 percent of workers say they have "no motivation to stay healthy." It is imperative for employees to understand the importance of preventive care and to participate in all preventive services offered to them. Preventive services such as checkups, vaccines, dental cleanings and mammograms can detect or prevent early health issues, saving employees from incurring future medical expenses and potentially saving their lives. Provide regular reminders that encourage employees to routinely use preventive care services.

Know your yearly medical expenses.
Encourage employees to be aware of how much they spend during the year on medical expenses. Knowing their total yearly expenses will help employees choose a benefits plan in the next enrollment period that best meets the employee’s specific needs. Remind employees that medical costs aren’t just doctor visit fees, but also include prescription drugs, certain over the counter medications and medical supplies.

Continuing ed
Even after Open Enrollment, employees rely on HR administrators to answer questions regarding benefits coverage. Using clear, concise messaging to consistently educate employees will give them the knowledge and confidence they need to take control of their health and ultimately reduce their own out-of-pocket expenses.
Technology has simplified the process of educating and communicating with employees. Agents and employers can easily streamline employee communications into one convenient place, use videos for consistent messaging or schedule notifications to land directly into an employee’s inbox.
Maintaining open communication with employees after the Open Enrollment period is a necessity for educating employees about plan benefits, encouraging healthy lifestyles and promoting wise spending.

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FlexibleSpendingAccountsonline June 15, 2011

The Secret to Maximizing Your Flexible Spending Account!
Author:Admin

Did you know that 30 million Americans who have paid into their FSAs end up leaving about $450 million of tax-free money unclaimed by the time the deadline rolls around. That’s what Jeremy Miller says, founder and president of FSAStore.com, a one-stop shopping site for FSA-friendly products and services. Remember, when it comes to flexible spending accounts (FSAs), you use it or lose it.

And where does all that unspent money go? Not in your wallet, but back to the people who really don’t need it…your employers.

So how do you minimize your losses and maximize your flexible spending account?

Find out whats covered.
Ok, so you may need a prescription for over-the-counter drugs now but there are plenty of other things for which you can get reimbursed. According to Miller, “There are 24,000 products that fit the FSA requirements, from first aid to family planning, and FSAStore sells 4,000 of those products.” Allocating less than last year because of the prescription drug change is a mistake.

Know Your Deadline.
A large majority companies require that you deplete your FSA account by the end of the year although there are some companies that provide you with another 3 month grace period. That means you have until March to take care of yourself and your family with 2010 dollars. Make sure you know what your company does.

Turnaround the paperwork ASAP.
Even if your company provides you with a 3 month extension, the date to file your reimbursement requests may be sooner. Don’t wait! Take a look at your annual receipts. Co-pays or other relevant medical fees are eligible for reimbursement. Get them in…now!

Check, double-check, and (okay) triple-check.
Know your balance and the deductions against it. Treat it like a checking account that you want to get to a zero balance.

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DailyFinance June 8, 2011

Don't Leave Medical Reimbursement Money on the Table
By Catherine New

Bridget Queally's manila envelope taunted her. It was overflowing with medical insurance claims, bills, receipts and other health-care related paperwork. Every month, it seemed to get a little thicker as she postponed dealing with it.

"I left it to the very last minute every year because I just didn't want to look at it," the mother of three teenagers told DailyFinance. "I knew that I was leaving money on the table and I felt badly." Like many women, Queally, 47, manages her family's household budget, including all the paperwork associated with medical care from at least six different doctors, both in- and out-of-network.

Queally is far from the only person overwhelmed by dealing with medical insurance administration. Now, a new company, Off Your Desk (offyourdesk.net), is offering to solve the problem for them.

Queally signed up for the service last November, using the company's pre-paid envelopes to send in her paperwork to a personal representative. Today, Queally says she has "complete confidence" she is getting the money she is due. Off Your Desk says on average, they get $2,200 per client in reimbursements.

Part concierge-service and part accountant, the claims specialists of Off Your Desk manage your health-care related paperwork and recover all the money you're due from your insurance company or special savings accounts. For people who just want to get current on their insurance paperwork, the company offers a one-time service for $295. For those who want someone to handle on-going claims and reimbursements, the cost is $65 per month.

Hundreds of Millions of Dollars Lost

Off Your Desk is one of a growing number of third-party companies focused on helping consumers maximize their medical dollars, whether recouping insurance money or spending for specialized pre-tax accounts. Every year, an American family of four leaves an average of $3,000 on the table that they are owed by the health insurance companies, estimates Off Your Desk.

FSAStore.com is another company aimed at helping consumers make the most of their flexible spending accounts. Jeremy Miller, founder of FSAStore, says there is a lot of confusion over what is and is not allowed under FSA guidelines. It's estimated that another $400 million was forfeited in flexible spending accounts by consumers last year, according to Miller's company. The store only sells approved products so that consumers don't let these tax-free dollars go to waste.

Why are Americans walking away from so much money? For starters, the insurance industry mis-processes 20% of claims, totaling around $15.5 billion every year, according to the American Medical Association. Another factor is the shift by employers to high-deductible plans that leave an increasing number of consumers paying out-of-pocket, and who must file for reimbursement for out-of-network benefits or pay for care with a tax-advantaged savings account. Complicated forms, timing issues relating to claim-filing, and lengthy appeals processes aggravate the problem. Changing rules over what products do and do not qualify for spending with special savings accounts continue add more confusion for reimbursements.

"One of the biggest issues we see is that customers just don't understand how their plan still plays a part if they go out of network," says Carrie McLean, a consumer specialist with ehealthinsurance.com. The result is that many people would rather walk away from money than deal with the headache of sorting out the insurance paperwork and submitting receipts.

McLean offers these tips to help save you money before you get a bill that surprises you.

  • Check your plan and see what you are and are not covered for.
  • Don't assume that a referral doctor is in network. Call the referral and ask if they are a "preferred provider" for a specific network.
  • Even if a doctor is listed on the literature from your insurance, call the office and confirm that you are covered.
  • If you really like an out-of-network doctor, ask your MD if he or she is willing to join your network.
  • Double-check your explanation of benefits. Be proactive in making sure that the codes and services match up.

Visit http://www.dailyfinance.com/2011/06/08/dont-leave-medical-reimbursement-money-on-the-table/ for more information

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CNNMoney.com (New York) - May 23, 2011

Venture Capital Deals
By Dan Primack

FSAStore.com, a New York-based online ecommerce site for flexible spending account-eligible products and services, has raised $800,000 in Series A funding. Point Judith Capital led the round, and was joined by Columbia Business School Lang Fund, Opal Moon LLC and individual angels.

Visit http://finance.fortune.cnn.com/2011/05/23/venture-capital-deals-2/ for more information.

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InsuranceQuotes.com (New York) - April, 2011

Millions of health care dollars at stake as FSA deadline looms
By John Egan

Health insurance consumers who deposited money into flexible spending accounts (FSAs) in 2010 could wind up wasting up to $400 million in 2011 if they don’t use the funds before an impending deadline, according to a projection from FSAStore.com.

Millions of U.S. workers face a March 15 “use it or lose it” deadline for FSA money they accrued in 2010, FSAStore.com says. Many employers offer that grace period each year so their employees aren’t forced to spend the money within a one-year window that typically closes Dec. 31.

Millions of Americans could be throwing away money if they don’t meet a March 15, 2011, deadline for their spending funds in their flexible spending accounts (FSAs).

On average, an FSA participant forfeits $86 in unused funds each year, according to WageWorks Inc., a manager of FSA benefits programs.

Generally, about 80 percent of employers’ health plans allow a grace period. The IRS-approved grace period took effect in 2005.

More than 30 million American consumers — including account holders and family members — are covered by FSAs, which pay for tens of thousands of health care products and services with tax-free dollars. More than 15 million FSAs are active in the United States.

“Millions of dollars are wasted each year simply because consumers do not deplete the funds in their FSAs,” says Jeremy Miller, FSAStore.com’s founder and president.

FSAStore.com based its projection on the average amount of unused money in an FSA account — roughly 2 percent to 4 percent of the total. In 2010, the average FSA contained $1,500. FSAStore.com used the lower 2 percent figure to come up with its projection.

Jody Dietel, chief compliance officer at WageWorks, offers these tips for FSA account holders who are staring at the March 15 spending deadline:

  • Review your health care expenses to be sure you’ve submitted all of your receipts. Often, this simple exercise of getting your paperwork in order depletes the money in your FSA.
  • Make sure you’re up to date on preventive care, tests, dental checkups, vision checkups and immunizations. In some cases, these services already may be fully covered by insurance, “but this is a good place to start,” Dietel says.
  • Take an inventory of health care supplies. For instance, do you need to stock up on contact lenses or contact lens supplies? Keep in mind that as of January 2011, nearly all over-the-counter medication purchases require a prescription before they can be covered by FSA funds. Previously, the federal government allowed all FSA over-the-counter medication purchases without a prescription.

Visit http://www.insurancequotes.com/health-insurance-fsa-deadline/ for more information.

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Columbia Business School Alumni Profile (New York)- Apr 2, 2011 Saturday

Alumni Profile: Jeremy Miller '10 on his Company, FSAStore.com, and Entrepreneurial Perseverance

Jeremy Miller '10 on his Company, FSAStore.com, and the drive to succeed.

Tell us about FSAStore.com and what have you been up to post graduation?

FSAStore.com's mission is to promote and encourage the use of Flexible Spending Accounts in a way that makes it easy for the average participant to understand, spend, and use their own FSA funds. Given our mission to makes things simple, we decided to carry only those products and services that you can buy with your FSA.

And because we get this question so often, let me detail exactly what an FSA is. An FSA allows employees to put aside tax free money to spend on medical expenses throughout the year, and can be used to cover many common expenses such as over-the-counter supplies, glasses, contacts, doctor visits, dental work, and more.

FSAStore.com launched right after graduation and along with my amazing business partner Azar Gurbanov '10 and our stellar team, we have been working on it full time ever since.

What is unique about your site?

We are the only standalone site catering to people with Flexible Spending Accounts and the only site exclusively carrying products and services for purchase with your FSA funds. Therefore we greatly simplify the process, and the headaches, that most people associate with these accounts, including “what can I use my FSA for!?” We also have formed several partnerships with FSA administrators that market our site as a service to their FSA participants.

What has been your biggest “A-Ha!” moment to date? How did it change your business?

There was a lot of fear around the impact of healthcare legislation but one of our strongest months was after this took place and sales and traffic has been strong despite the change in FSA accounts so I think it helped our business to realize that we were really filling a need. The icing on the cake was when we noticed how many orders were coming from New York City - a place that has a drugstore on every corner. Really, each day is full of firsts and aha moments, constantly trying to learn and do better each time.

How has the Healthcare debate impacted your business? What has been the biggest change?

We originally thought the healthcare changes would topple the business. The fact that half the products we sell now require a prescription for reimbursement kept us up at night, strategizing what to do in midst of this change. We quickly realized that our value proposition didn’t change based on what might happen in healthcare. We make the education process for consumers with FSAs simple, while also making it easy for them to shop. There are still thousands of products that do not require this prescription to be reimbursed and with all the twists and turns surrounding the healthcare debate, the information our site provides is more important than ever.

What improvements would you like to see?

We are constantly improving our site and offerings. We have several projects that we are working on that I can’t detail at the moment, but that seek to further cement the relationship between our site and our users.

How do you promote your business?

Our administrator partners have been key promoters of our business; they are big fans of the site and they especially appreciate the ease of use for FSA account holders.

How have the classes [you took] at Columbia Business School shaped your business/management approach?

The progression of the Entrepreneurship program from Murray Low’s Intro to Venturing through Cliff Schorer and Brendan Burn’s Launching New Ventures and the Greenhouse Program really enabled me to focus and develop my business idea throughout my time at Columbia Business School.

Managerial Negotiations with Ann Bartel was one of my favorites as it taught skills that I use every day. Michael Preston’s Managing the Growing Company had a great focus on the importance of keeping growth in mind at every stage and in every aspect of the company. I found the most enriching class from a personal standpoint was Personal Leadership and Success with Hitendra Wadhwa.

The Columbia Alumni Connection: How have you used it?

The Columbia Alumni Connection has been instrumental in the formation and growth of my business. I started reaching out to Alumni at Columbia before I even began my MBA program. I was able to connect with recent entrepreneurs, get advice on classes, and discuss different business approaches. I also found prospective clients through the Columbia network.

Current classmates also figured into my network, one of our initial investors was in my learning team, and my business partner, COO Azar Gurbanov '10, was in my Cluster (X!).

Where do you see your company in 5 years?

I see us thriving in this competitive, low margin industry. We have focused on a concrete need in the marketplace and will not stop until we addressed it.

What advice would you give to a graduating Columbia student with entrepreneurial aspirations?

My motto when I started Columbia and went through the Entrepreneurship Program was the good ol’ saying, “Just Do It.” I really took it to heart - it was my password for all of my Columbia logins!

So for a graduating student with entrepreneurial aspirations I would simply say now is the time to just do it. A lot of us look at the opportunity costs of giving up the sure thing with something that might not pay the bills immediately. You’ve just got to go for it.

And also I think after you go for it, persistence is key. Stick with it, don’t give up, and follow through with what you said you would do, pour your heart into it remembering the other important things you have to do to balance it all.

But I would also say don’t expect it to be easy. I’ve learned to celebrate successes along the way, because the work is long, the end goal is undetermined, and each day is never the same.

Please Visit Alumni Profile Jeremy Miller on his Company FSAStore.com and Entrepreneurial Perseverance for more information.

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Crain’s Health Newsletter- Mar 14, 2011 Monday

Manhattan Startup Targets FSAs

The grace period on flexible spending accounts for 2010 medical purchases ends March 15, and millions of dollars may be forfeited by consumers if they do not deplete the funds in these use-it-or-lose-it accounts. One New York City entrepreneur has based a business model on FSAs, which pay for health expenses using pretax dollars funded by payroll deductions. Columbia Business School grad Jeremy Miller has created fsastore.com, a site that lets customers purchase goods allowed under federal FSA regulations. But health care reform changed the rules for FSAs—and put a dent in the business plan. Most OTC purchases are no longer allowed without a prescription from a doctor. The site plans to add an online pharmacy in 2011 and will continue selling OTC remedies, but will make clear which products are eligible for purchase with FSA funds. Visit http://www.crainsnewyork.com/article/20110314/PULSE/110319959 for more information.

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Startribune.com- Mar 11, 2011 Friday

Time is running out to spend FSA dollars
By Kara McGuire

Add: "Deplete the flexible spending account" to your weekend "to-do" list. Tuesday is absolutely the last day to spend all of the pre-tax money you set aside from last year's paycheck to lessen your out-of-pocket cost for some medical expenses.

Because any cash that's not spent by then is forfeited, many consumers head to the drug store at this time of year to stock up the medicine cabinet. However, changes included in the health care legislation passed last year have increased restrictions on what you can and can't buy with your flexible spending account cash.

You used to be able to buy cold medicines, pain relievers and a host of other over-the-counter products. But on January 1, many over-the-counter medicines became ineligible for purchase using flexible spending account dollars without a doctor's prescription.

FSAStore.com has a complete list of products that do and don't need a doctor's note.The site estimates that $400 million will be lost in these use-it-or-lose-it accounts this year. Unspent money goes to your employer.

Savesmartspendhealthy.com is also chock full of ideas for using this cash, including stories from real people about how the accounts have saved them money.

If you don't currently have an account and would like to better understand how much money you could save if you sign up for one during your company's open enrollment period, check out this FSA calculator.

Visit http://www.startribune.com/lifestyle/yourmoney/blogs/117828618.html for more information.

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DailyWorth- Mar 11, 2011 Friday

FSA Money: 4 Days to Use It or Lose It
By MP Dunleavey

The grace period for spending down the 2010 funds in your flexible-spending account is up on March 15.

Remember, whether you allocated $200 or $2,000 to be saved in your FSA last year, those are use-it-or-lose-it funds.

Not every company provides a grace period. If yours does, you have until Tuesday to spend that pre-tax money. (Also, be sure check what your company’s deadline is for filing FSA expenses.)

The good news: Thanks to changes in healthcare legislation, you can use your FSA money for a much wider range of products and services.

And many retailers are eager to help you spend that money (and get reimbursed, of course). Depending on where you shop, ask about qualified expenses.

There’s even a new FSAstore online, that specializes in products that now qualify under flexible-spending account rules. Act fast. What are you going to buy with your FSA money?

Visit http://www.dailyworth.com/blog/689-fsa-money-4-days-to-use-it-or-lose-it for more information.

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Walletpop (New York)- Mar 9, 2011 Wednesday

Seven Tips for Spending Down Your FSA Fast!
By Lan N. Nguyen

March 15 is just six days away, and, for many, that's the last day they'll be able to spend down their 2010 flexible spending account (FSA) -- pre-tax dollars set aside for medical or dependent care expenses. If you're one of those who want to use it and not lose it, here are seven tips on how to blow your money in a short time:

  • Stockpile Supplies

    Getting over-the-counter medicine may require a prescription these days, but if you're visiting the doctor before March 15, ask your physician for several months' supply of the OTC drugs that you and your family often use. However, be aware that some doctors may be reluctant to do so because of malpractice concerns, while others may charge a prescription fee as high as $10 for each Rx.

    If your physician doesn't want to help stock your medicine cabinets until the kids are grown, there are lots of other items that can take a big bite out of your FSA account, including prescription sunglasses, contact lenses for a year or more, First Aid kits for every place your kids are, breast pumps and durable medical equipment such as a wheelchair.

    "There are 1,500 products you can buy that are FSA approved which don't require a prescription," Jeremy Miller, founder of FSAstore.com, told WalletPop in a telephone interview. "Popular items on our site right now are diagnostic equipment, thermometers, first aid kits, family planning and heating pads."

  • Meet With Your Health Team

    Getting a doctor's appointment in five days may be impossible, but seeing other medical staff may be easier. Human resources expert Steve Kane recommends seeing the dentist, your chiropractor, your physical therapist and any other medical personnel you think you need to see.

    Now is also the time to sign up for medical programs if you're interested in losing weight or kicking your drug, alcohol or tobacco habits. Take advantage of that gym membership discount, as long as you have a doctor's note.

  • Consider Prepaying

    In some cases, you can prepay for a program or treatment. "If you get services from an institution, you can prepay them as long as they take a check or credit card," Kane told WalletPop in a telephone interview. "If you have a special ed program or after-school care for your disabled child, anything like that, it should be reimbursable."

  • No Expense Is Too Small

    One of the biggest reimbursable items we tend to overlook is travel expenses for all those medical visits, said Kane. With gasoline over $3.50 a gallon nowadays, those miles add up. Comb through your receipts and also look for items like parking stubs, train fare and cab fare.

  • Round Up All Expenses

    That means not just the expenses you incurred but also those of your dependents. Thanks to the new health care law, adult children up to age 26 covered by their parents' health insurance can qualify as dependents on your FSAs. Ask your FSA administrator to clarify.

  • Spend It Now or Lose It

    They really mean it when they say, "use it or lose it." Having a long shopping list or a fistful of prescriptions doesn't help. Ordering something online doesn't help. You must have paid for it by the deadline for it to count.

  • Double-Check Your Account

    So you've spent you money -- all is well, right? Not necessarily. When you seek reimbursement or use your FSA Debit card, make sure the money you've spent is taken from your 2010 account and not this year's, warned Miller. Snafus happen. You just don't want to be paying for someone else's mistake.

Visit http://www.walletpop.com/2011/03/09/seven-tips-for-spending-down-your-fsa-fast/ for more information

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Daily News (New York)-Mar 7, 2011 Monday

Extra Time To Cash In On Flex Spending
By Phyllis Furman Daily News Business Writer pfurman@nydailynews.com Section: YOUR MONEY; pg. 26

You may have more time than you think to use up your flex spending dollars.

Many employers offer a grace period during which eligible health care expenses can be incurred and reimbursed.

That means you might not have to forfeit money left over from last year in your tax-advantaged flexible spending account.

If you're entitled to extra time and you have dollars remaining, now's the time to rush out and buy items such as eyeglasses, hearing aids and bandages, or try to schedule immediate appointments with doctors and dentists. Health expenses not covered by insurance, including co-pays, also are eligible.

The government-mandated deadline is March 15.

"A lot of people don't know they have this grace period," said Jeremy Miller, president of FSAStore.com, which sells products eligible for flex spending reimbursement.

If you don't spend this money, consider it gone. As much as $400 million of hard-earned dollars will be left behind, FSAStore.com estimated.

Anyone with a flex spending account should take note of a big change that took effect Jan. 1: As a result of the health care overhaul, applications for reimbursement of over-the-counter drugs require a prescription, with the exception of insulin.

"It's an extra step you need to take," said Barry Schilmeister, a partner at human resources consulting firm Mercer. "If you want to buy Claritin-D over the counter and you want to pay for it with 2010 flex spending funds, you need a prescription."

With flex spending accounts, employees voluntarily set aside pretax dollars from their salary. They designate how much they want to contribute and their employers periodically deduct contributions from their paychecks.

The accounts are popular: Nearly 90% of New York-area companies with 500 or more employees offered them in 2010, according to Mercer. Nearly 25% of eligible employees took part, with an average contribution of $1,426. The participation rate may be low because some workers say they can't afford to contribute, despite the tax break.

The savings can be meaningful. A middle-income New York City taxpayer who contributes $2,000 would save about $700.

The IRS does not limit the size of flexible spending accounts, leaving that decision to employers. But another big change is coming: As of Jan. 1, 2013, accounts will be limited to $2,500 a year.

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Walletpop (New York)- Feb 4, 2011 Friday

Four Steps to Maximize Your Flexible Spending Account
By Lan N. Nguyen

When it comes to flexible spending accounts (FSAs), you use it or lose it. That's meant the 30 million Americans who have paid into their FSAs have left about $450 million of tax-free money unclaimed by the time the deadline rolls around, according to Jeremy Miller, founder and president of FSAStore.com, a one-stop shopping site for FSA-friendly products and services.

Most of this unspent cash goes back to those who don't exactly need it: your employers. To make sure you're making the most of your FSA, here are four steps you can take.

1. Find Out the Exact Deadline

Most companies require that you spend down your account by Dec. 31. However, some companies offer a grace period of the first three months of this year. That means you have until March to take care of yourself and your family with 2010 dollars.

2. Get the Paperwork in ASAP

While the grace period may take you into the middle of March, the date to file all your reimbursement requests may be sooner, warned Josh King, general counsel at Avvo.com, a free website that rates and profiles doctors and lawyers, in an email interview with WalletPop.
Pore over your health insurance claims. "Are there any co-pays, co-insurance payments or the like that you haven't gotten reimbursed from your FSA?" King asked. "Now's the time!"

3. Check and Double Check

Your balance, that is, whether your deadline is March or December, recommended Bob Meighan, vice president and CPA at TurboTax. In addition, keep track of what you're claiming so you're not one of those consumers who contributes to the $450 million left unspent.

4. Know What Gets Covered

You may need a prescription for over-the-counter drugs nowadays, but there are still many other things you can get reimbursed for. Setting aside less than last year because of this change is a mistake, said Miller. "There are 24,000 products that fit the FSA requirements, from first aid to family planning, and FSAStore sells 4,000 of those products."
Many FSAs will also cover travel expenses for a doctor's visit, contact lenses, dental check-ups and programs to stop smoking, drinking or taking drugs.
Check out our story in November for even more items covered by your FSA.

Visithttp://www.walletpop.com/2011/02/04/four-steps-to-maximize-your-flexible-spending-account/ for more information

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Benefits Selling- Feb 1, 2011 Tuesday

FSA changes go into effect
By Jenny Ivy

Although many fought hard for repeal, the Jan. 1 effective date for new rules on medical savings plans quickly passed with little change to how and when the reform law would be implemented.

Grassroots organization Save Flexible Spending Plans was one of several groups that pushed for a repeal of the restriction on over-the-counter medications that now need a prescription to be purchased through an FSA, HSA or similar account.

Retailers and pharmacies resonated the opposition, and asked Congress to at least push back the law’s date, so consumers would have time to digest it and systems could be updated – after Jan. 15, customers no longer would be able to purchase OTC drugs with an account debit card, and would have to front the money and try later for reimbursement. They could still use that card for other eligible medical expenses such as first-aid supplies.

By late December – a week before the law took effect – the IRS backtracked on its debit card provision. Consumers with an FSA or HRA can buy OTC medications using their card, but they’ll need to present a prescription at the pharmacy, or make it available to a Web-based or mail-order vendor.

Those with HSA or MSA accounts who spend money inappropriately will not only owe taxes on the purchase, but will get hit with a 20 percent penalty.

According to FSAstore.com, there are still close to 30,000 products that remain FSA-eligible. The next major reform measure to hit flexible savings accounts will happen in 2013, when contributions will be capped at $2,500.

Visit http://www.benefitssellingmag.com/Issues/2011/February-2011/Pages/FSA-changes-go-into-effect.aspx for more information

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The Atlanta Journal – Constitution (ATJC)- Jan 26, 2011 Wednesday

Medical savings face changes: New limits to be imposed on flexible spending accounts. Millions in tax-free money could be lost.
By Misty Williams Section: Main D1

Use it or lose it.

That's the message for health care consumers who could collectively forfeit millions of dollars left over in flexible spending accounts, which generally don't roll over into the new year, although some employees may have grace periods, benefit experts say.

Meanwhile, fans of the medical savings tool --- which allows people to sock away tax-free money for future expenses --- are facing new restrictions on how they can spend those dollars in 2011 and beyond. Among the changes: Consumers will no longer be able to use their accounts to buy over-the-counter drugs without a prescription and will eventually face a cap on the amount of money they can put in the fund.

Nationwide, employees could lose upward of $400 million in tax-free money because they didn't use up their 2010 FSA dollars, according to FSAStore.com, an online marketplace for FSA-eligible products and services.

But depending on their employers, some people have until March 15 to spend that money and perhaps longer to actually file claims, said Tony Holmes, a partner in the Atlanta office of Mercer, a national consulting firm.

For Atlanta business owner Rob Carter, emptying his FSA by the end of the year hasn't always been easy.

"It becomes a bit of a game of chicken," said Carter, who estimates he has forfeited $300 or $400 in past years.

The challenge is predicting expenses for the year to avoid putting too little or too much into the FSA, he said.

More recently, Carter, who typically puts about $1,500 into his account, has erred on the side of underestimating his expenses --- enabling him to use up all of his funds last year.

Medical savings accounts have recently grown in popularity as rising health costs have driven consumers to get more involved in their own care.

"One of the huge issues with [health care] costs is people not being engaged," Mercer's Holmes said. "We want people to have more financial skin in the game so they'll ask more questions."

Some 85 percent of companies with 500-plus employees offer a flexible spending account, with 23 percent of workers taking part --- contributing an average of $1,500, a Mercer survey shows. In 2009, 3 percent of total FSA funds went unspent, averaging $45 per worker, the firm said.

Experts advise consumers to calculate their health care expenses from the previous year to help determine a realistic amount to put in an FSA.

For Andres Romero, the FSA has become a critical money-saving tool.

The local financial planner has one child who already has braces and two more who likely will need pricey orthodontia in the near future.

"Between that and increasing deductibles and co-pays in my insurance, I kind of depended on flexible spending to alleviate some of that cost," he said.

Romero estimates he saved about $3,000 on taxes in 2010.

However, new restrictions spurred by the federal health care overhaul will affect how FSAs can be used in the future.

In 2013, FSAs will be capped at $2,500. Many large employers now allow workers to contribute up to $5,000.

Romero said that could amount to a roughly $2,000 tax hit for him.

Some consumers use their FSAs to cover large predictable needs, which can easily exceed $2,500, said Garry Hill, manager of the group benefits practice at the Atlanta insurance brokerage firm Sterling Risk Advisors. "The net result is going to be a tax increase on those folks," Hill said.

This month, another restriction from the health care overhaul will prevent patients from using their FSAs to pay for over-the-counter drugs such as cough medicine or aspirin without a prescription. The rule has implications for patients and medical providers alike.

Atlanta pharmacist Ira Katz, who owns Little Five Points Pharmacy, said some pharmacists may not fill prescriptions for over-the-counter drugs because of the expense. On average, it costs roughly $10.60 in overhead costs to fill a prescription, not including the actual price of the drug, he said.

Other types of medical spending accounts are also proving to be popular. Health reimbursement accounts and health savings accounts both allow consumers to put aside money for future medical expenses, but, unlike an FSA, the money rolls over into the new year so people don't lose it, Mercer's Holmes said.

In 2010, 38 percent of Atlanta employers and 50 percent of companies with 500 workers or more offered consumer-directed health plans, which feature an HRA or HSA, according to a Mercer survey.

Consumers need to find out all their health care options before making a choice of which consumer product fits their needs, Holmes said.

As a single, healthy young man, Norcross-area resident Ed Wilson felt he didn't need a flexible spending account.

But now married and with a baby on the way, Wilson decided to put $2,200 into an FSA for 2011 --- mainly to help cover delivery costs.

Anything left over will go to co-pays for doctor visits and other needs, he said.

The $2,500 cap doesn't bother Wilson since his family is still small.

"For larger families," he said, "I could see that becoming an issue."

For Reprints in the Original Format: http://www.ajc.com/info/content/services/info/reprint2.html

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Reuters Blog- Jan 11, 2011 Tuesday

Time running out on FSAs

There are only a few days left to buy over-the-counter drugs using your flexible spending account (FSA) debit card before new rules kick in that require a prescription for common healthcare products such as Tylenol and cough syrup.

Under new guidelines that came into effect on January 1st, “any drug or medicine is going to require a prescription from your doctor if you’re going to submit a receipt to your administrator,” explains Jeremy Miller, president and co-founder of FSAStore.com. But those with FSA or health reimbursement arrangement (HRA) debit cards have through January 15th to make OTC drug purchases without a prescription while merchants update their systems, the IRS says.

But before you rush out to stock up on Band-Aids, take note: not every OTC product requires a prescription post-January 15th.

“There’s been a lot of misconceptions about what items fall under the new rule,” says Miller.

Generally speaking, items that contain medicinal ingredients — including antacids, pain relievers and cough suppressants — need a prescription. But everything from pregnancy tests to bandages to blood pressure monitors are still fair game. (See the complete list here.)

FSAs allow consumers to sock away pre-tax money to spend on drugs and medical supplies, but new rules are afoot: on top of this month’s changes to OTC drug purchases, your annual FSA contributions will be capped at $2,500 in 2013.

Still, not everyone takes advantage of them, Miller says. A survey by Mercer Consulting found that 79 percent of large companies offer FSAs, but only 21 percent of eligible employees participate in the plan.

“There’s a lot of people who could be saving money on these products. Save yourself some money,” Miller says.

Visit http://blogs.reuters.com/prism-money/2011/01/11/time-running-out-on-fsas/ for more information

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Benefitspro - Jan 3, 2011 Monday

IRS adjusts FSA debit card restriction
By Jenny Ivy

The IRS is backtracking on a rule that would have banned health account holders from using debit cards to purchase over-the-counter medication that now needs a prescription.

In late December, the IRS announced health reimbursement arrangement and flexible spending arrangement debit cards will be allowed to purchase OTC drugs after Jan. 15, as long as the account holder has a prescription in hand at the pharmacy, or a prescription is given to a Web-based or mail-order vendor.

The IRS says the use of debit cards must comply with procedures reflecting those that pharmacies currently follow when selling prescribed medicines or drugs.

Without the change of policy, account holders would have had to pay for the OTC drugs up front, and try for reimbursement later with the proper prescription documentation and a receipt.

Other purchases - like crutches and first-aid supplies - that don't need a prescription but are considered eligible medical expenses are still allowed as a debit card purchase, and insulin purchases can still be made with or without a prescription.

The prescription requirement applies to purchases made on or after Jan. 1, 2011, and not to purchases made in 2010 even if reimbursed after Dec. 31, 2010.

Those who try to use account funds to pay for an OTC drug without a prescription will have to use post-tax money and pay an additional 20 percent tax.

Several groups in opposition of the new restrictions on tax-advantaged accounts have beenurging the new Congress to push back the effective date, if not repeal the provision on prescription OTC medication altogether. There has also been backlash against another health reform law that will put a cap on pre-tax contributions to $2,500 starting Jan. 1, 2013. According to FSAstore.com, citing data from the Special Interest Group for IIAS Standards, there are 28,370 products that remain FSA-eligible without a prescription in 2011.

Visit http://www.benefitspro.com/2011/01/03/irs-adjusts-fsa-debit-card-restriction for more information

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SMARTMONEY NOVEMBER 29, 2010

Flexible Spending Accounts: New Rules
By ANNAMARIA ANDRIOTIS

With one month left to exhaust any money remaining in flexible spending accounts, it s time for the annual ritual of stocking up on aspirin, re-ordering contact lenses and squeezing in one more round of skincare treatment . But starting next year, new rules will make that drugstore shopping spree a lot harder -- which means re-thinking how you spend this year s money, and how much you allocate for 2011.

The new rules are a hassle. Starting in January, many over-the-counter medications will not be covered by FSAs without a prescription. If you want a tax break for Tylenol, you ll need a prescription from your doctor. Yes, that defeats the point of over-the-counter, and doctors aren t exactly eager to spend their days signing off on routine meds, says Dr. Roland Goertz, president of the American Academy of Family Physicians, which represents 94,000 doctors. But consumers who don t want to jump through these hoops could lose about $500 to $1,000 of tax savings each year, says Thomas Harte, a board member with the National Association of Health Underwriters.

As it is, consumers don t always make the most of their FSAs. Only one in three eligible employees participate, according to Mercer, and some don t spend all the money they set aside. (The excess returns to the employer, who typically uses it to offset the cost of administering the FSA program.) Last year, the average participant who forfeited funds left $43 unspent not a fortune, but up 54% from the year before. Under the new rules, it s likely that amount will keep growing, says Sheryl Garrett, a fee-only certified financial planner or that consumers will simply stop using the FSA altogether and give up the tax break.

There s a tentative list here, there are new strategies for using the remainder of this year s FSA money. Specifically: Stock up now on medications that will require a prescription next year, and delay any non-urgent doctor visits until January. That way, this year s money will pay for those drugstore buys, next year s money will pay for the check-up, and you ll have a chance to get prescriptions for anything you might need early in the year, says Harte.

And while you re at the doctor, ask about her policy for writing prescriptions for over-the-counter medications. Many doctors will agree, says Goertz, but some, frustrated by the paperwork and time required, will decline. Some may require a patient visit before writing a prescription, which means consumers could have to budget more for co-pays, and other doctors might levy an extra fee for the service. This should all be part of the equation for employees who can still adjust their FSA allocation for next year, experts say: If you re using that money primarily for drugstore spending, you may find the tax savings isn t worth the hassle.

Visit http://www.smartmoney.com/plan/helath-care/flexible-spending-accounts-are-becoming-stingier/?cid=djem_sm_dailyviews_h&print=1#article_tab_article for more information

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