US Politics

Spend your FSA balance before it expires: Many workers ‘aren’t aware that they have a deadline,’ expert says

As the year draws to a close, employees with flexible spending accounts (FSAs) should be aware of the impending deadline to utilize their remaining balances before December 31. FSAs are popular among workers as they allow individuals to set aside pre-tax dollars for eligible health expenses, providing significant tax savings and budgeting advantages. However, a critical aspect of these accounts is the “use-it-or-lose-it” rule, which stipulates that any unspent funds at the end of the year are forfeited. This means that if you haven’t been proactive in managing your FSA, you could be leaving money on the table.

To maximize the benefits of your FSA, it’s essential to review your remaining balance and plan accordingly. Eligible expenses include a wide range of healthcare costs such as copayments, prescription medications, dental treatments, and even certain over-the-counter items. Many FSAs also cover expenses related to vision care, including glasses and contact lenses. For those who might be concerned about meeting their spending threshold, some employers offer grace periods or allow a carryover of a limited amount into the following year, but these options vary widely. Therefore, it’s crucial to check with your HR department to understand your specific plan’s rules.

As the deadline approaches, consider scheduling any necessary medical appointments or purchasing eligible items to ensure you fully utilize your FSA funds. Some employees may find it beneficial to stock up on necessary health products, like first-aid supplies or prescription sunglasses, to avoid losing their hard-earned money. Additionally, keeping receipts and maintaining a list of eligible expenses can help streamline the process. With careful planning and awareness of the deadlines, you can make the most of your FSA and ensure that your contributions work for you, rather than going to waste.