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Last Minute Flexible Spending Account Ideas

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Flexible Spending Accounts, or FSAs, are “use it or lose it” and, come June 30th, I’m going to lose what remains on my balance since my benefits plan refreshes every July 1st. I wrote something on FSA’s a little while back, called How Does a Flexible Spending Account Work, and now the time has come for me to apply it. We all have a set of expenses we believe are health related, well, the government has added a bunch of expenses you probably didn’t think you can use with an FSA. Additionally, reading this list is probably easier than reading this IRS document
.

Everyone Is Eligible

For the following, everyone is eligible to spend their FSA money on these products.

  1. Over The Counter Medications – This is always the backup plan and probably first on your list. If you’re close to needing a refill on that bottle of aspirin or some Loratadine (the anti-histamine in Claritin, except much cheaper). For more on this, straight from the horse’s mouth, read this IRS briefing.
  2. First Aid Kits (and their contents) – These are also eligible for FSA cash, but sometimes the contents individually aren’t. For example, an ice compress or an ACE bandage by itself won’t be eligible, but if they’re in a kit then your plan administrator won’t be the wiser.
  3. Contact Lens Solution – Obviously, only viable for contact lens wearers but saline solutino lasts forever, so stock up now.
  4. Transportation – Did you know you can get money for medical trips? In 2003, you could get 13 cents per mile to and from the doctor’s office.
  5. “Alternative” Medicine – Even though some might disparage them, you can also spend the FSA cash on alternative medicines such as acupuncture, chiropractic treatment, Christian Science practitioners and massage (if it treats something specific, doctor’s note required unfortunately).

Doctor’s Note Required

For the following, you’ll need a doctor’s note or other documentation in order to spend FSA money.

  1. Vitamins – With a documented deficiency in a particular vitamin, vitamins are eligible for FSA reimbursement.
  2. Sunscreen – This isn’t for those who burn easily, but for those who have a doctor who orders them to wear it.

Have any personal favorites or FSA strategies you’d like to share for last minute spenders?

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9 Responses to “Last Minute Flexible Spending Account Ideas”

  1. nickel says:

    I’ve always wondered who gets the money when you forfeit it? The IRS? Your employer? Or the plan administrator?
    fivecentnickel.com

  2. jim says:

    Your employer gets them, it balances out for people who spend their entire yearly balance and then leave the job. You can spend the FSA money before you actually contribute it, for example:

    You elect to contribute $1200 per year, $100 a month. In the first month, you do a lasik procedure that costs way more than $1200, request reimbursement, and it is approved. In the second month, you quit. You are not responsible for the contributing the other $1100… so the money people lose is to offset that.

  3. nickel says:

    Thanks for the response… I’ve actually taken advantage of the ‘cash it out and leave your job’ angle in the past. I profited about $2000 and felt guilty about it for quite awhile as I never knew this is the way it’s supposed to work. I also didn’t ask because I didn’t want to come clean and pay that money back. Glad to hear I didn’t do anything shady, even though I thought that I did.

    By the way, I bet most employers still come out ahead.

    fivecentnickel.com

  4. jim says:

    It’s part of doing business, they aren’t obligated by law to offer FSA’s and many don’t and it pales in comparison to how much they probably kick in for your healthcare plan.

  5. How Flexible Spending Accounts SHOULD Work
    The use-it-or-lose-it provision of tax-exempt flexible spending accounts really, really irks me. I just dont get why it is that unspent money should be forfeited at the end of the year. Why should honest, hard-working people be pe…

  6. Jeff says:

    I will never do a spending account again. “Waste it” or loose it, it SUX that the Flex spending account can not be rolled over. I will waste more trying to spend it this year than I will save on taxes. Another problem is this could encourage people to put off necessary surgery till the next year to get the tax benifit.

    • ernesto says:

      But you get reimbursed for most of the purchases made through a FSA. So, it’s hard to waste anything.

      Just look at your plan providers list of eligible items. Or IRS publication 502, and then go shopping.

  7. Jeff says:

    I bet most companies are making a killing on this, unless there is a high turnover rate.
    Where I work I bet the surplus is unbeleivable

  8. Bob says:

    I think FLEX is a great way to get a 12 month interest-free loan.
    At a 33% tax bracket, if you opt for $1000/year, you only have to spend $667 to make back what you opted for since flex dollars are pre-tax dollars!


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