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.
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.
Groundhog Day is a yearly event where Americans turn to a giant rodent to predict the end of winter. It's also a popular movie starring Bill Murray in which his character re-lived the same day over and over, until he got the details right. Let's focus on the latter.
Because FSAs are a great way to save on medical costs by using tax-free money, the last thing you want to do is relive the same mixups you made with your spending in previous years. Maybe you spent your money too quickly. Maybe you left funds in your account and lost them. No matter the issue, balanced yearly spending comes down to having a plan.
Take a look back
A great method to plan for this year is to look back at your expenses from 2017:
- What product(s) contributed most to your FSA spending?
- Did you find yourself short of an FSA-eligible product when you most needed it?
- What product(s) did you run out of because it wasn't in the usual FSA purchase list?
- Did you have a surprise expense, such as a medical emergency or a newly diagnosed condition?
- Did you end up buying FSA-eligible products or services with post-tax dollars?
Answering these questions will provide a head start to where you want to spend your FSA contributions, as well as when you want to spend those dollars.
Take a look around
When putting together your budget, be sure to leave about 10-20% of your funds aside to cover unexpected medical expenditures. Whether this is the cost of medication, an emergency room visit, or a trip to a specialist, you'll have additional breathing room by using tax-free funds.
After all, the 2018 flu season has been one of the worst in decades, so it's good to get ahead of the bug by putting a little money aside.
On that note, if there's one expense you should factor into your budget for 2018, it's an appointment with your primary care doctor to get a full assessment of your well-being. With a better understanding of your health, you'll have a much better idea of what your medical spending will be over the course of the year.
Take a look ahead
The best way to avoid losing your FSA dollars at the end of the year is to create a budget that outlines how much you have in the account to spend, as well as the expenses you know will be needed over the course of the year.
When planning your FSA spending, you might have the option to roll over up to $500 into the next program period, as well as a 2 ½ month grace period to move into next year's plan from this year's contributions.
On the other side of the coin, even with this flexibility, you might want to leave wiggle room in the account for unexpected mishaps that might be eligible for FSA spending. This includes any FSA-eligible services you might need, and keeping your medicine cabinet supplied with essentials, such as first-aid products.
The key takeaway is to not be like Bill Murray in "Groundhog Day." Though no one can predict the future, planning your FSA spending can help you avoid reliving the same situations again.
If you are like many people with FSAs, the end of the year deadline can bring with it a mad rush to spend your leftover funds, so you don't lose them. This tax-free money is a great way to cover qualified health-related spending, while enjoying savings on taxable income. But waiting to spend right before the deadline might just lead to losing the funds if you're not careful.
For 2018, use these simple tips to plan ahead with your FSAs. As you'll learn, they don't have to be a year-end burden -- in fact, they're opportunities to save on the products you need, with the tax-free money you've already set aside year-round.
Make a spending plan your New Year's resolution
If you head into a new tax and employment year understanding what your paycheck contributions will be for your FSA account, you already have a key piece of planning in place for knowing how much you have available to spend in any given month.
The FSA contribution limit in 2018 will be $2,650, which comes out to about $221 per month.
If your medical expenses are straightforward, here are two easy rules of thumb for choosing an FSA amount:
- If your out-of-pocket medical bills typically amount to $221 a month or more — or roughly $2,650 a year — consider contributing the maximum to your FSA.
- If you don't contribute the maximum, consider adding $200-300 per month.
- If your medical expenses are lower, calculating the total of your estimated copayments, dental and vision expenses for next year should cover your needs.
And you probably don't want to try and zero-out your FSA funds on a monthly basis so your account does have some money available for unexpected expenses. Like when your entire extended family catches a seasonal flu … at the same time … and requires a huge amount of over-the-counter decongestants.
What you can do is take stock of FSA-eligible items you know you purchase regularly from basic medicine cabinet restocking or maybe just a replacement of reading glasses that get lost like clockwork.
The goal with a spending plan is to prepare regular purchases in advance on a regular basis – maybe monthly, maybe every other month or even just quarterly – which figure into your regular FSA fund contribution levels, while leaving some room for unexpected emergencies.
Avoiding the end-of-year crunch
This way you will be consistently spending that money that has the yearly use-it-or-lose-it deadline on items you know you'll be needing throughout the year anyway. Doing so will avoid a total crunch at the end of next year and will keep your contributions going toward FSA-eligible products.
Anyone making that end-of-year mass purchase right now is probably thinking back on the number of items that were bought out of pocket that could have been purchased using FSA funds with a little more planning.
In fact, if you're scrambling to spend this year's FSA contributions before the deadline hits, once that task is complete take a few more minutes and put together a spending plan for next year.
You've already put thought into what you regularly need and done the research on different products that are FSA-eligible. There are probably a few in the mix you didn't even realize qualified for FSA spending. Check out our eligibility list for a complete listing of FSA-eligible products and services.
It's your money. Use it to ensure continued health and wellness for 2018 and beyond.
Do you have a Grace Period ending on March 15? Do you still have remaining funds?
We've included a short checklist to help you keep track of your FSA spending:
1. Check your FSA balance. Contact your FSA administrator today to find out what your remaining balance is.
2. Submit claims. Learn more about claims filing for your Flexible Spending Account.
3. Budgeting. Keep track of not only your own funds, but remind friends and family who have a Flexible Spending Account. It's easy to forget about FSA funds, but if you track them year-round then you will avoid the risk of losing your hard-earned money!
4. Shop for everyday health products. FSAstore.com offers thousands of FSA eligible products. We also recently added New Bundles, which are a convenient way to use remaining FSA funds and save on healthcare expenses for you and your family. Our Bundles come are meant to fit any FSA budget.
5. Ask questions, Get Quick Answers. If you're ever unsure about your Flexible Spending Account coverage, eligibility of services or products, or just want to know more, feel free to contact us any time! Our dedicated customer support team is here to help you & can lend their expertise.
6. Follow us on Social Media. We're active on many different networks and ready to answer any questions. We'll also share special offers and fun tips on social media that you won't want to miss!
We're halfway through the year and you're probably daydreaming about summer plans. And how could you not be? Vacations on the beach, relaxing out in the yard, day trips with friends... you name it.
Coincidentally, this time of the year also calls for an important, but often overlooked, health checkup.
Are you on track with your Flexible Spending Account spending?
The deadline for these "Use it or lose it" plans for most participants isn't until December 31, but it's easy to forget about that when you have a full year. For some participants, the FSA deadline is actually approaching on June 30! Check with your FSA provider if you're not sure when your plan year ends.
It's good to monitor your FSA plan throughout the year to a). Not forget you have an FSA, and b.) Use it as you need it.
Think of your FSA as a regular bank account as you track expenses and stick to a budget. It has the added value of tax-free savings! Before enrolling, you estimated yearly FSA medical expenses in terms of office visits, medical supplies, and your dependents' medical needs.
Follow these three tips to ensure you're maximizing FSA savings:
1. Check your FSA funds every few months
FSAstore.com offers an online FSA calculator to help you figure out expenses. Don't let your pre-tax FSA funds expire at the end of plan year, or get stuck with a large sum to spend at the end of the year!*
*If you find that you are overestimating or underestimating your FSA contributions, connect with your HR department or FSA benefits provider about adjusting the limit next year.
2. Visit a specialist for a medical exam or checkup
Did you know your FSA lets you visit regular health specialists including doctors, ophthalmologists and dentists? Did you know you could also see acupuncturists or chiropractors who are not covered by your insurance? Find a provider near you with FSAstore.com FSA Eligible Services.
3. Use your FSA to buy everyday health care products
Need band aids, contact lens solution, or hot/cold packs for travel? These are eligible with your FSA. For summer, be sun safe with FSA eligible sunscreens. Bring along first aid kits, heat wraps or shoe inserts for camping, road trips or hikes. Simply use your FSA card to buy FSA eligible products at FSAstore.com!
FSA Eligible Products
The holidays are just around the corner! And, if you have a Flexible Spending Account (FSA), you know how busy this time of the year is. You are likely looking to spend down your FSA before your plan year ends (check with your FSA administrator about your plan) on December 31st - that's only 2 weeks away, by the way! But do you know how many products are FSA eligible? Are you aware that your FSA funds can buy sunscreen, heat wraps, an ear thermometer, and even reading glasses?
Wall Street Journal journalist, Anna Prior, recently discussed what medical expenses qualify (or don’t) for FSA spending.
Examples of qualified expenses:
- Bandages, glasses and contacts, athletic treatments, blood pressure monitors. Certain over-the-counter medicines require a prescription to be reimbursed under an FSA.
Expenses not qualified:
- Gym memberships, weight loss programs, and teeth whitening.
FSA Service examples:
- Many medical services are FSA eligible as long as the procedures are necessary medical treatments (not cosmetic).
Shopping at FSAstore
If you want to find FSA eligible products, then take a look at FSAstore.com. FSAstore is a one-stop-shop exclusively carrying FSA eligible products. Through the FSA Eligibility List, you’ll find which products require or don’t require a prescription.
End of 2012 Reminder:
Because of the “use it or lose it” rule, you will lose any funds you don’t spend by the end of your FSA plan year. Instead of forfeiting your money, scan different FSAstore.com categories for products you need. Start shopping now for New Arrivals or look through our Best Selling items!