Indispensable year-end and grace period guidelines

"It's the most won-der-ful tiiiiiiime of the yearrrrr…" Since it's December, you've clearly heard this line a few hundred times already. But for the FSA Store crew, December really is a fantastic part of the year. Not only do we love the holidays, but we also love seeing people make the most of their remaining FSA funds, so they don't lose them to forfeiture.

That said, while we encourage people to use their FSA funds by the end of the calendar year (and take advantage of some really good sales) we also need to remind people that they may not need to do all their shopping before 12/31. If you're one of the many FSA holders with a grace period extension , exhale! You have more time to use those 2018 funds.

Determine if you have the grace period option

Not all FSA owners have a grace period deadline extension, so don't assume yours does. If you didn't hear about these regulations during your benefits open enrollment (or if you simply don't remember) speak with your benefits administrator right away!

FSA administrators, whose information can usually be found on the back of an FSA card or by contacting your HR department, can let you know the exact details of your FSA. If it turns out you have this option and your FSA plan year ends December 31, then you likely have until March 15 of 2019 to make tax-free healthcare purchases with 2018 funds.

Know your balance and if you have a carryover option

Whether you have a grace period extension, or your funds expire at the stroke of midnight on New Year's Eve, it's always good to know exactly how much you have in your FSA. After all, you wouldn't lose sight of your other bank accounts, right?

To add to the importance of knowing your balance, some FSAs allow for up to $500 to roll over at year end. These plans can not also allow a grace period, so if you're rushing to spend down remaining funds at the end of the year, it's good to know all of your options.

Using your FSA's online portal, or by calling your plan administrator, you can see how much money is waiting to be spent, so you can make a determination about incremental budgeting, or decide to splurge on a hi-tech, bigger-ticket healthcare item.

Speaking of which…

Assess your family's medical needs

While that awesome electric foot circulator is really tempting if you have the funds remaining, the FSA deadline is a perfect time to take stock of your family's health needs, in and out of the medicine cabinet.

For starters, your FSA is about far more than just products. If you've been putting off doctor follow-up visits, specialist appointments, dental checkups or other services, your FSA funds are a great tax-free resource to push you in the right direction. December is just the beginning of a long winter, so having your family's health in check before the mercury drops is an ideal way to spend them down.

But if you're healthy, take a look at other items your family might need to ensure a winter's worth of healthier living. Running low on first aid items? Want a way to bounce back from workout soreness? Maybe get ahead of colds and allergies? Use your flex dollars to stay on top of all of your health needs.

Be organized (like never before)

Your FSA card makes it easy to buy eligible items without worry about acceptance or paperwork. And our own Prescription Process takes things to the next level by requesting prescriptions from doctors on your behalf, so you can quickly make your purchases without any hassle.

But that doesn't mean you shouldn't keep your receipts and documentation organized and filed, in case there's a hiccup along the way. With so little time until the deadline (even if you DO have a grace period, March 15 comes quickly!) the last thing your family needs to worry about is a misplaced receipt or stray prescription.

That last part is particularly important. If you're planning on using remaining funds for OTC medications - like Tylenol, Advil, Claritin and even some cough drops - you'll need a doctor's prescription for FSA reimbursement.

Like we mentioned, our Prescription Process eliminates much of the hassle, but if you're buying from a retail store, you need to hand your prescription to the pharmacist before being able to complete the purchase with FSA funds.

Remember to buy things you NEED...

Over the years, we've made several references to "stockpiling" on FSA-eligible products (and why you probably shouldn't do it). While the term hasn't been fully defined by the IRS, it basically means buying more eligible items with your FSA than you're realistically able to use before the end of the taxable year.

Now, we can't determine how many Band-Aids your family needs. But, by the very nature of FSAs, any product purchased should be necessary for you, your spouse and qualified dependents. There may not be "hard and fast" rules about parameters, but your administrator can usually figure out what's up by analyzing how many items you bought towards the end of the year.

And if a purchase gets flagged by the administrator? Well, there's a chance it could be removed from your eligible purchases, meaning you'll be alerted, and may even have to pay the account back for those items

Shop smart, shop well, and be healthy. There's roughly 2,500+ eligible ways to spend your funds without having to stockpile anything.

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Bottom line? If you have an FSA, December really is the most wonderful time of the year. If you have a 12/31 deadline, you can take advantage of sales and specials that ensure you're making the most of your remaining funds. If you have a grace period extension, you can use this time to budget your early 2019 health needs, based on how much of your 2018 balance is left.

Either way, you're making smart, tax-free purchases for items that can ensure your family gets off to a healthy start in the new year.