ShopReal Money: There's still time to map your FSA spending for the rest of 2019
Didn't 2019 just start last week? January 2020 may be closer than the previous one, but for many of you, FSA spending is still something you're planning for the remainder of the year.
You may have spent more of your FSA funds than you planned to early in the year. But before you start kicking yourself for overspending, you have plenty of time to still budget the remainder of your 2019 -- and use this planning to create a sustainable budget for next year, so you truly make the most of your funds each month.
Re-examine your monthly needs
We're all guilty of it -- starting a year with a budget in mind, then seeing that full allocation of funds and spending it early in the year. There's absolutely nothing wrong with that, if that's your game plan. But many FSA users will agree that setting a budget for each month's needs allows these tax-free dollars to go a little further.
If you're interested in making a monthly budget for your FSA funds that can last you throughout the rest of the year, start by creating a list of your monthly necessities, take stock of what items in your home need to be replenished in the future (such as bandages, over-the-counter remedies, etc.), and set limits each month on how much you'll spend.
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See if there are changes to make
Since it's open enrollment season, also take some time to calculate how much you think you'll spend on qualified medical expenses. Our FSA Calculator can help you estimate your health spending!
The calculation takes into account:
- Out-of-pocket expenses such as co-pays and deductibles for medical services including routine office visits, specialist office visits, and even hospitalization or acupuncture.
- Over-the-counter FSA-eligible items and prescriptions.
- Dental care and vision care.
Visit your doctor
If there's one extra expense you should always factor in, it should be medical appointments -- even basic trips to your primary care doctor to get a full assessment of your current state of health. With a clean bill of health in hand, you'll be able to settle into the winter (and have a much better idea of what your medical spending will amount to over the course of next year, to help your budgeting for the year ahead).
Buy items online as you need them - look for seasonal care, over-the-counter FSA items that you use often, and discover just how many products are FSA-eligible. Note that certain over-the-counter products will require a prescription to be reimbursed under your FSA.
By planning ahead, you'll easily avoid buying products in bulk (or unnecessarily stockpiling) and instead enjoy a variety of items - rather than ending up with multiple pairs of eyeglasses, or unneeded boxes of bandages (which isn't recommended ever, because the IRS frowns upon you buying more of one item than you would need for any given plan year)..
Think beyond prescriptions and standard appointments
Depending on the availability of your preferred physician and your need for prescription drugs, you may have limited ways to spend your FSA dollars. Review the rules of your plan and you may find out that you may be reimbursed for qualifying diagnostic devices and even smoking cessation and weight loss programs when needed to treat a diagnosed medical condition and prescribed by your doctor, chiropractor medical services, and many other types of expenses.
Even if you're healthy as a horse, don't forget to plan for the unexpected during these last few months of 2019. When putting together your budget, be sure to still leave about 10-20% of your funds aside to cover unexpected medical expenditures.
Whether this is for the cost of medication, an emergency room visit, or a trip to a specialist, this will give you additional breathing room to put toward major medical needs with your tax-free funds.
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Whether you budget week-to-week, or plan to use your FSA for bigger things, our weekly Real Money column will help you maximize your flex spending dollars. Look for it every Tuesday, exclusively on the FSAstore.com Learning Center. And for the latest info about your health and financial wellness, be sure to follow us on Facebook, Instagram and Twitter.
Your top FSA grace period deadline Q&As
With the FSA grace period ending on March 15, we've seen a boost in social media activity as FSA users look to spend their remaining funds before the deadline.
We're here to answer the most-popular FSA grace period questions to help you better manage your FSA funds. These are just a few of the most-commonly asked questions, but the answers can help equip you with the knowledge to make this a successful March deadline.
"If I purchase an Rx item, where do I send the prescription?"
Over-the-counter products that contain medicated ingredients - such as Tylenol, Advil, Claritin and even some cough drops - require a doctor's prescription for FSA reimbursement. In most stores, you need to hand your prescription to the pharmacist and you will be able to use your FSA card with the prescription number you get.
However, if you shop on FSAstore.com, we have a easy Prescription Process that requests prescriptions from your doctor on your behalf, so you can quickly make your purchase without any hassle.
Update: As of March 2020 with the passage of the CARES Act, the OTC Rx requirement has been repealed and prescriptions are no longer necessary to purchase over-the-counter medicines with an FSA or HSA. Additionally, menstrual care products like tampons and pads are fully FSA-/HSA-eligible. Learn more here.
"If I retire this year, what happens to the leftover balance in my account?"
If you're planning to retire and you're enrolled in an FSA, you should spend the money before leaving your position. If you don't, your unspent money will go back to your employer.
If you've been keeping track of your FSA balance and spending throughout the year, hopefully there won't be much leftover. If you need some inspiration for new ways to use your remaining balance, check out our hi-tech health and surprisingly eligible goodies collections.
"What specific health practitioners can sign a Letter of Medical Necessity?"
Medical products and services that fall outside of FSA eligibility rules like massage therapy and calcium supplements can still be eligible with a Letter of Medical Necessity (LMN) from a doctor. However, your plan administrator can still approve or deny the expense.
"What's the difference between the FSA grace period and run-out period?"
Let's tackle this as simply as possible: the FSA grace period is your last chance to spend, the "run-out" period is your last chance to file claims.
The FSA grace period gives you 2.5 months after the end of your plan year to spend your remaining FSA funds from the previous year. So if your plan usually ends on December 31, you would have until March 15 to spend the last of your 2019 funds.
The run-out period is an option offered by your employer to submit claims from the previous year. This will give you a chance to be reimbursed for any outstanding medical expenses you incurred during 2019 and forgot to submit for reimbursement. Check with your benefits administrator to see if this option is offered to you (since not all plans have it) and to find out how much time you have to submit expenses.
"So, can I use 2019 FSA funds to pay for 2020 expenses?"
Employers have the option to elect either a 2.5 month grace period or a $500 rollover option to help you not lose your funds. If you have the FSA grace period, your plan year will function a bit differently than those without one.
For example, if you have a plan year beginning in January 2019 that ends in December runs into 2020, the FSA grace period extends this deadline until March 15, 2020. Check with your plan administrator to see if you have the grace period option.
Those with a traditional 12/31 deadline have to spend down their funds by this date. Those with FSA rollover can move up to $500 of their remaining funds into their 2020 FSA totals.
If you have more questions about how to #GetFlexSmart, reach out to us on Facebook, Instagram and Twitter. We'll be reporting back on more common questions soon!
How does the FSA prescription process work?
Update: As of March 2020 with the passage of the CARES Act, the OTC Rx requirement has been repealed and prescriptions are no longer necessary to purchase over-the-counter medicines with an FSA or HSA. Additionally, menstrual care products like tampons and pads are fully FSA-/HSA-eligible. Learn more here.
"Do I need a prescription for Advil? Why and how does that work for my Flexible Spending Account?"
Flexible Spending Accounts (FSA) and Health Savings Accounts (HSA) are among the most popular employee benefit add-ons available. Both can cover medical products and services, but there is one aspect of these plans that consumers find consuming: the reimbursement process for Rx items. A keyadjustment to the reimbursement process of over-the-counter (OTC) medications with these accounts in recent years continues to cause confusion for a lot of people.
As of January 1, 2011, the IRS put into place regulations regarding the purchase of OTC medicines, and these could include pain relievers or antacids (basically any item containing an active medical ingredient).
At first glance, that may sounds like a ton of extra work to purchase the products you and your family need, but the prescription process couldn't be easier at FSAstore.com! We make it easy for you to process the prescriptions and order the items you need.
How do I get started if I need to get reimbursed with an FSA? Can FSA Storehelp me process an FSA prescription?
Before your next doctor's appointment, be sure to check out the Eligibility List available to search through hundreds of products and services to find out their FSA prescription process for reimbursement. When you make a purchase of an OTC medicine, you or your doctor can mail or fax the prescription to our pharmacy partner. Be sure to plan ahead -- for products you use often, request multiple refills so you can re-submit an order quickly and easily in the future.
Last but not least, if you don't have a doctor's appointment on the horizon, FSAstore.com can contact your doctor directly. Simply provide us with your physician's name, address and phone number, and we'll handle the rest through our Rx Process!
With copies of these prescriptions, claim forms, receipts and anything else your benefits administrator needs, you'll be well on your way toward full reimbursement for your purchases.
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