What Is A Flexible Spending Account
Also called a flexible spending arrangement, an FSA can be used for medical expenses, dental care and vision care. The amount you decide to contribute to the account for the year is deducted from your salary before income taxes. This reduces your taxable income, saving you money on taxes. Depending on your benefit plan, your employer may contribute to your FSA as well.
You will either have a debit card to pay for medical expenses as you go, or youll have to submit receipts and documentation for reimbursement. You can use your FSA for your own medical expenses, or expenses incurred by your spouse or any dependents you claim on your taxes. You can also use FSA funds for any adult children on your health plan that will be 26 or younger on Dec. 31.
Unless you have an ongoing medical condition, some experts say flexible spending accounts may not be the best use of your paycheck. With most young, healthy folks with decent benefits, out-of-pocket expenses would be pretty low, says Greg Szymanski, director of human resources at Geonerco Management in Seattle. Id recommend they take full advantage of something like retirement savings. If youre healthy, an FSA doesnt seem worth the effort.
To decide if an FSA is right for you, take stock of your health. If you have any ongoing or expected medical needs you might need to pay for in the upcoming year, an FSA is a great use of your money. If you cant think of ways youd use the account, then you probably dont need one.
Accessing And Using Fsa Dollars
Navigating your insurance coverage and figuring out what is and isnt eligible can be a lot to take on. Talking with a representative who is familiar with your employers coverage details can make a world of difference.
Utilizing your FSA money to pay for vision related expenses makes it easier to take care of your eyes and vision. Schedule an eye exam today and put your contributions to good use.
To learn more about accessing and using FSA funds, be sure to read What is an FSA?
Schedule an exam
Eligible Dependent Care Fsa Expenses
A Dependent Care Flexible Spending Account uses your contributions to cover dependent day care expenses. Contributions are not subject to federal taxes, and not subject to state taxes in most states. For details about state and/or local taxes, contact your personal tax advisor.
Eligible dependents include children under 13 years of age, and a spouse or other dependent that is physically or mentally incapable of caring for themselves.
How does it work?
- During enrollment, estimate your annual out-of-pocket dependent day care expenses. This is your annual contribution to your Dependent Care FSA. The IRS allows a maximum of $5,000 for your annual contribution, but your employer may set a lower limit.
- Divide your annual contribution by the number of paychecks you receive annually. This is how much money will be deducted from each paycheck and placed in your Dependent Care FSA. Remember, you’re saving money because no federal taxes are taken out of your contributions.
- Pay your dependent day care expenses out of pocket, and then submit the expense to Cigna for reimbursement using the Reimbursement Request Form
- You’ll be reimbursed for eligible expenses using the dollars contributed to your FSA.
Unused dollars cannot be carried over into the following year, so think carefully about how much to contribute.
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Heating And Cooling Pads
Struggle with lower back pain or nagging injuries? Heating and cooling pads can help, and you can purchase them with FSA funds. Many brands and types are available on the FSA Store online, but you can also just pick one up from your local drugstore.
Many different first-aid kits are FSA-eligible, including large travel and adventure kits.
Alphabetical List Of Covered And Not Covered Items
The following is an alphabetical list of frequently encountered items. Some of these items may be reimbursed, and some may not. Each item is followed by a brief note of explanation.
Abortion – Medical expenses associated with a legal abortion are reimbursable.
Acid controllers – see Over-the-counter medications.
Acne laser treatment – Expenses paid for acne treatment are covered.
Acne medications – see Over-the-counter medications.
Acupuncture – Medical expenses paid for acupuncture are reimbursable.
Adoption – The cost of the adoption itself is not covered, however things like physicals for the adoptive parents, pre-adoption counseling, and other health related expenses may be covered.
Adult diapers – Expenses paid for diapers are reimbursable.
After-sun gel/lotions with aloe – Expenses for medicated gels and lotions to treat effects of sun exposure are covered.
Age Management Systems – This is a comprehensive, evidence-based approach to age management and includes a set of diagnostics establishing a hormonal, metabolic and physical baseline. This is considered general well-being and would not be covered .
Airplane air contaminant protection – Expenses paid for over-the-counter medications to prevent the spread of airborne contaminants while flying are reimbursable.
Alcoholism and drug abuse – Medical expenses paid to a treatment center for alcohol or drug abuse are reimbursable. This includes meals and lodging provided by the center during treatment.
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Your Fsa And How To Spend Leftover Cash
Before time runs out, make it a priority to spend those FSA funds before theyre gone forever. Start by contacting your FSA provider and finding out how much is left in your account.
If you have both FSAs for dependents and health and medical, be aware that you can only spend each fund in its category.
According to IRS Publication 969, you can only spend FSA money on qualified medical expenses.” Generally, services you receive that involve a healthcare professional qualify, but others do too. If you need help coming up with ideas, maybe a few of these will help.
How Does Fsa Work
FSA operates on a use-it-or-lose-it provision you must spend the money in your FSA account by the end of the year or risk losing it for good. Typically, you’d either have to spend it all by a deadline or roll a portion of it over.
The COVID relief bill signed late last year changes things, though.
Now, you have an extra year to spend your FSA dollars, for both 2020 and 2021. Put plainly: the FSA money you accrued in 2020 will still be available to you until December 31, 2021 the money you accrue in 20201 will be available until December 31, 2022.
FSA Store estimates that more than $400 million is forfeited every year in FSA funds because employees either miss or forget their spending deadlines . It’s your money and it’s pre-tax it doesn’t make sense not to use it.
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What Can You Buy With Your Fsa Money
You can use FSA dollars to pay for medical expenses that aren’t covered by a health plan, like co-pays, deductibles, dental and vision care, or dependent daycare, though eligible expenses can vary based on the plan. But if it’s nearing the end of the year and you haven’t used your money to help meet your deductible or pay medical expenses, you have the option of spending it on supplies like over-the-counter medication.
The nitty-gritty details depend on the plan your employer has in place, but you can skip the burden of research by shopping the selection at the FSA store. They do the homework for you and curate more than 4,000 products that are guaranteed to be covered. If they’re somehow not, you get your money back.
The Cost Of An Eye Exam
In order to purchase eyeglasses with FSA funds, a prescription from an eye doctor is required. An annual eye exam not only measures how sharp your vision is but allows your eye doctor to assess other parts of the eye that reflect your overall health.
The cost of an eye exam varies by practice and by your insurance plan. Its wise to consult with your HR representative regarding your coverage and to get quotes from local eye care practices before making an appointment.
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Hpfy Stores Accept Fsa Card For Payment
- Save your federal income tax dollars
- Tax free withdrawals for qualified medical expenses
- Ability to withdraw funds from the FSA account to pay for medical supplies even if you havent yet placed the funds in the FSA account
- Year round medical supplies and health care essentials for you and your family
Top 8 Places To Use Your Health Fsa
onMay 23, 2019
There are many ways to use a Health FSA. Some of the places might surprise you.
The FSA Store
The FSA Store is one of the best places to buy items with your Health FSA. Its the one stop shop for eligible expenses. From sleep assistance to medical braces and support to kid friendly items, find what you need across the different categories. Start browsing.
Box store retailers
There are many eligible items at larger retailers like Target, Walmart and Costco. . When you get to the register, the stores payment system will identify eligible items from your purchase and pull the correct amount from your FSA.
National and regional pharmacy chains
CVS and Walgreens are two great examples of chain retailers who offer a host of common eligible items. Visit CVS or Walgreens online to search and purchase products related to eye-care, pain relief, family planning and more eligible items.
Your local pharmacy
If you are picking up a prescription at a local pharmacy, as long as your pharmacy is listed as a merchant, your Health FSA should be accepted. Learn more about Merchant Category Codes here. If your card is not accepted by the Merchant, you can still use your Health FSA. You will just need to submit a receipt with a claim. You can easily do this online or with the BRiMobile app. See our walk-through on how to submit claims.
The dentist
Why? Check out the graph in our blog What is substantiation and why is it required?
The eye doctors
Alternative therapy specialists
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Important Information On The Cares Act
The Coronavirus Aid, Relief, and Economic Security Act contains important changes in how you can use FSAs. Certain over-the-counter drugs and medications, as well as menstrual care products, are now considered qualified medical expenses, without the need for a physician prescription. You may use your FSA funds to pay for these products.
Use your Optum Bank debit Mastercard® as you normally would for these purchases. Individual merchants, like pharmacies and convenience stores, must update their point of sale system to now recognize these products as eligible health care expenses for FSAs. If their system is not updated and the sale doesnât process, you can pay out-of-pocket then reimburse yourself with account funds. As a reminder, keep your itemized receipt or explanations of benefits, which are needed to verify each purchase so you can be reimbursed. To submit a claim for reimbursement, sign into your account and select “File a Claim” from the “I want to” section.
Both provisions for OTC and menstrual products apply to amounts paid or expenses incurred on or after January 1, 2020, and do not have an expiration date.
Forms To Use Hsas Hras And Fsas
You can pay for certain health care, vision, and dental costs with an HRA, HSA, or Health Care FSA. The type of account you have may determine whose costs are covered and which costs are eligible.
HSA – You can use your HSA to pay for eligible health care, dental, and vision expenses for yourself, your spouse, or eligible dependents .
HRA – You can use your HRA to pay for eligible medical, dental, or vision expenses for yourself or your dependents enrolled in the HRA. Your employer determines which health care expenses are eligible under your HRA. Refer to your plan documents for more details.
Health Care FSA – You can use your health care FSA to pay yourself back for eligible health care, vision, and dental expenses for yourself, your spouse, or eligible dependents .
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What Vitamins Are Fsa/hsa Eligible
One of the most common questions we receive in the FSA Learning Center from our customers is whether daily multivitamins and supplements are FSA\HSA eligible. Many people frequently ask, “are vitamins FSA eligible?” and “Are vitamins HSA eligible?”. Traditionally, multivitamins are used to fill in the nutritional gaps that a person is lacking in his/her diet, but certain supplements can also help to alleviate a nutritional deficiency that may be caused by a specific medical condition. However, when it comes to FSA/HSA eligibility, most vitamins and nutritional supplements are not eligible, with a few notable exceptions. But since these products fall into an eligibility gray area, we will clear up the confusion as to what may make it onto your FSA shopping list!
What determines vitamin eligibility?
A product/service’s FSA eligibility is determined by the Internal Revenue Service specifically Internal Revenue Code Section 213. This code defines medical care expenses for which the IRS allows a tax deduction as follows.
“The term medical care” means amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body.”
What vitamins and nutritional supplements are FSA/HSA eligible?
Creative Ways To Spend Your Fsa Money Before The Deadline
Here are a few items on FSAstore.com that you can buy with your pre-tax money before you lose it: thermometers, feminine care, sunscreen, vitamins, condoms, high-tech healthcare , and travel pillows with orthopedic neck support. View all categories here.
And since the new Affordable Care Act required over-the-counter medications to come with a prescription from a doctor for FSA reimbursement, FSAstore created a Prescription Process that contacts your doctor for you, so you can get the information you need to complete the purchase.
You can also buy products from Warby Parker or Felix Gray glasses with your FSA and HSA dollars as long as your FSA or HSA card is affiliated with a major credit card you’re even able to book an at-home Zeel massage with it.
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Want To Know More About Menstrual Health
This change in legislature is a small but important step toward increasing access to menstrual hygiene products and helping to end period poverty here in the US.
Weâre passionate about ending the stigmas associated with womenâs health, advocating for equality under the law, and helping to spread educational information.
Want to know more? Weâve gathered some of our most valuable educational resources for you to explore.
Changes From 1st January 2021
Food supplements are regulated by legislation made in each part of the UK . These Regulations cross refer to the Annex of Directive 2002/46/EC, which sets out rules for vitamins and minerals used in food supplements. On 1 January 2021 The Nutrition Regulations 2019 and The Nutrition Regulations 2020 came into force. These transferred responsibilities for the regulation of food supplements from EU organisations involved in the risk assessment and risk management processes to appropriate authorities and bodies in GB and reflected the Protocol on Ireland / Northern Ireland. Therefore, from 1 January 2021 the UK has its own list of Vitamins and Minerals for use in Food Supplements and modification processes in Great Britain. For further information on these requirements, visit The Nutrition Regulations and see Guidance notes on legislation implementing Directive 2002/46/EC on food supplements.
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A Few Fast Facts About Fsas
- FSAs are limited to $2,750 per year per employer. If youre married, your spouse can put up to $2,750 in an FSA with their employer too.
- You can use funds in your FSA to pay for certain medical and dental expenses for you, your spouse if youre married, and your dependents.
- You can spend FSA funds to pay deductibles and copayments, but not for insurance premiums.
- You can spend FSA funds on prescription medications, as well as over-the-counter medicines with a doctor’s prescription. Reimbursements for insulin are allowed without a prescription.
- FSAs may also be used to cover costs of medical equipment like crutches, supplies like bandages, and diagnostic devices like blood sugar test kits.
- See a list of generally permitted medical and dental expenses.
Plan Amendment Required To Accommodate Otc Products
Now that expenses for menstrual care products and over-the-counter drugs and medications can be purchased with a flexible spending account or health reimbursement arrangement without a prescription, employers will need to adopt a plan document amendment to accommodate this change.
Below are helpful questions and answers regarding the plan document amendment process.
How do we amend our companys FSA or HRA Plan Document and Summary Plan Description to allow for the reimbursement of OTC drugs and femine products?To make this process easier for you, Ameriflex has provided one-page amendment documents, which can be found on our website here for FSA plans, and here for HRAs.
Is there a fee associated with the amendments?No. These amendment pages have no additional cost.
How do I make use of the amendment pages?Simply sign the Plan Document amendment page and keep it on file along with your signed Plan Document. Next, sign the Summary Plan Description amendment page and forward a signed copy of that page to all employees participating in your companys FSA and/or HRA plan.
Once the amendment pages are signed, do I need to return them to Ameriflex?No. You are not required to return a copy to Ameriflex. However, please be sure to maintain your originals on file along with your existing plan documents.
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