There are more than a few ways you can avoid losing FSA funds at the end of the year.
Don’t over fund your account during Open Enrollment
If you put too much money in your account, there’s a greater chance you won’t be able to use it all. Avoid the risk by starting off with a more conservative amount in your account.
Only put enough money in for a rollover (if offered by your company)
The maximum amount you can put in your Medical FSA is a little over $2,700. If you know your company lets you carry a portion of unused money into the next year (known as a rollover or carryover feature), go up to that amount, but not more.
Check your balance regularly
It doesn’t matter if you check your balance once a month or only a few times a year. Just check it semi-regularly to keep a pulse on what you have left in the account.
It’ll help you avoid the shock of checking in November or December and realizing you have to burn through $1,000 dollars in four weeks (or less).
Live a little (splurge)
The FSA Store offers a ton of great products, including higher end items, some of which have even been recognized by the likes of Elle and Allure. Additionally, this is the perfect change to snag that DNA Test, which may be considered an eligible purchase.
Just remember: when it comes to eligibility, where you buy an item is as important as what item you’re buying. The main thing to remember is that your benefits card is designed to work at stores where most of the items sold are eligible. The keyword here being “most.”
Avoid common mistakes during your run out period
Every company has a run out period. You can read more about a run out period here, but in essence, a run out period is a window of time after your plan year ends when you can still use up your funds from the previous year.
However, there are a few caveats to be aware of when you’re submitting claims in order to use up those funds. Learn how to avoid common mistakes.
Consider what you spent the most money on last year
If you know you have recurring eligible expenses that equal a certain dollar amount every year, set aside at least that amount. Think of it this way: If this is your second or third time rushing to spend all of your FSA dollars, this year is your chance to take those life lessons and deposit the perfect amount into your FSA.
Try to plan ahead for things that you KNOW are coming up
Similarly, if you can look ahead at planned expenses (like surgery and post procedure visits), you can set aside money for that now. You can also stock up on eligible medicine cabinet items that you know you’ll use later in the year, like sunscreen.
What happens if you don’t successfully use your FSA funds?
Well, it depends on the arrangement your employer has, but in general, you can expect the following:
- Any unused money left over at the end of the year is no longer yours
- Unused funds go to your employer
Check out our other blogs on Flexible Spending Accounts:
- 7 ways to use up your FSA money in 7 days
- Have you forfeited your FSA funds?
- Top 8 places to use your Health FSA
- Wait, what do you mean these aren’t eligible under my FSA?
- 10 Top Weirdest Eligible Expenses
For more guidance on simplifying the complexity of benefits for maximum savings and peace of mind, subscribe to the Benefit Resource Blog today.