How to use your Flexible Spending Account this year

You can use your Flexible Spending Account (FSA) to pay for many different types of over-the-counter medical expenses in 2014 ranging from co-pays to deductibles for dental and eye care, alternative medical services, over-the-counter items and prescriptions.. A Flexible Spending Account is limited to a contribution of up to $2,500 per year. However, how much you can contribute also depends on the limits imposed by your FSA plan. Sometimes an employer will also contribute to an FSA.

An FSA works by letting you set aside money toward out-of-pocket medical costs. This money set aside is pre-tax, and FSAs are only available based on employment offerings (your company must offer FSAs).

Spending Down your Flexible Spending Account

You have to use the money you set aside in your FSA during the so-called plan year. However, if your employer offers another option, then you may have additional time to spend down your money.

--Your employer can offer a grace period. The grace period is an extension of 2 ½ months to use the money in your FSA. Say your plan year expires in December, you would have until March 15 to spend down your FSA funds.

--An employer could also offer a carryover of up to $500/year to use in the next year. This money would rollover from 2014 to 2015, if you had an FSA ending in December 2014.

Employers do not have to offer either of these options, but if they choose to offer one, then your FSA cannot also have the other. So, you could have a grace period, but not a carryover. It's good to ask your HR department or check in with your FSA administrator to find out the details specific to your plan.

Remember: any money you do not use at the end of your FSA plan year (with the extension included as well) may be lost. It's best to keep careful tabs on your FSA funds, so you don't risk losing your money.

You can use your FSA for co-pays and deductibles, but also for medical products. Examples of FSA eligible items include bandages and breast pumps. FSAstore.com carries thousands of FSA eligible products to make it easy for you to shop for your specific needs. Just browse different categories on our site to get a better idea.