Got an FSA? Your Deadline for Usage is Coming Up Quick
Use it or lose it.
That’s the phrase passed around this time of the year referring to Flex Spending dollars. Health FSAs – or Flexible Spending Accounts – can save you considerable money by allowing you to squirrel away pretax dollars to use for qualified medical expenses. The caveat is that you must use the funds in your FSA before the end of the year. In this blog, we will outline the details of the FSA program so you can save next year. We will also share why you should act now to avoid losing the money you set aside in 2022.
As Oregonians, we’re fortunate not to pay taxes on our purchases. It is a significant benefit to living in our beautiful state. Depending on how much health care you use each year, FSAs can be a fantastic way to continue saving. The 2022 limit for contributions was $2,850 (up from $2,750 in 2021). This means you can set aside $2,850 of pretax money. You can only use this money on qualified healthcare expenses throughout the year. At the time of this writing, the contribution max for 2023 has not yet been established by the IRS.
When COVID-19 struck in 2020, temporary rules under the 2020 Cares Act were enacted, allowing people to roll over their FSA dollars. This extension ends on December 31, 2022. If you don’t spend the remaining money in your FSA, you lose it forever. This can be a considerable amount of money lost if you don’t plan appropriately.
Now, there are exceptions. About one-third (36%) of companies provide employees a 2.5-month grace period to spend their FSA money. And about 42% allow employees to roll over a limited amount each year. If your company falls in the remaining 23%, your money is forfeited at the end of the year. And if you happen to work for a company that provides a grace period, about one-third will still end up forfeiting their money because they didn’t use it in time. Check with your company to determine the specifics of your FSA plan.
Understanding Your FSA
For many Americans, it can be difficult to estimate how much money is needed for healthcare expenses. It really comes down to thinking about what healthcare visits, prescriptions, supplements, testing, etc., you and your family need to have done in the year ahead and then setting aside that amount. The challenge with this is that sometimes people set aside more than they used and end up with a large amount remaining in their account at the end of the year. If this sounds like you, we have a few ideas to help you not waste your hard-earned money.
- Schedule any healthcare visits now. If you are due to see the doctor for anything, now is the time to schedule an appointment. If you act fast, you may be able to get in before the end of the year. Remember, you are not alone, as there are many people who wait until the last quarter to get needed medical treatments.
- If you’ve been putting off healthcare treatments, consider getting them done now. Have you been putting off a medical procedure, test, imaging, or treatment? If you have money left in your account, use it to get the care you’ve been putting off. This can include cosmetic treatments that fall under qualified medical expenses, blood work, hormone testing and treatment, dental procedures, and even LASIK eye surgery. There are many ways to use your FSA money. What do you or your family need to do to feel their best? Have you been considering IV Therapy? Now is the perfect time to give it a try.
- Buy medical supplies and supplements for the year ahead. This is the perfect time to stock up on supplements that optimize your health. The list of FSA-eligible items was expanded in 2020. If you’re running low on over-the-counter medication, such as pain relievers and allergy medication, replace what you have with enough to get you through 2023. The IRS does not allow you to stockpile more products than you would use in that tax year, so be mindful of quantities. You can also stock up on COVID-19 tests, masks, hand sanitizers, pregnancy tests, sunscreen, thermometers, and baby monitors. Do you purchase your supplements through OnePeak Medical? Stock up on what you will need for the year ahead. Plus, take advantage of any specials we’re offering. That’s a win-win!
You work hard for your money. Spend it wisely. If you would like to schedule an appointment at OnePeak Medical, we’d love to see you. Book online today.