When, how and where can I spend FSA dollars?
If you have a health insurance plan with your employer, you may have the option to set aside pre-tax funds in a flexible spending account (FSA) for qualifying out-of-pocket vision and medical expenses. FSAs are not available with Marketplace health insurance plans.
FSA funds are available for use at the beginning of the plan year, regardless of the amount you’ve actually contributed, and generally expire at the end of the year. Contributions are exempt from federal income tax, unemployment tax, and Social Security and Medicare tax.
In 2021, you can contribute a maximum of $2,750 to an individual FSA account and $5,000 to a dependent care FSA.
Where can FSA dollars be spent?
If you aren’t given a card to spend your FSA funds, or if you don’t have it during a purchase or doctor’s appointment, you can use a regular credit or debit card and use your receipt to apply for reimbursement from your FSA provider.
Need to check your FSA balance? Many providers allow you to check your balance online and some provide details through a mobile app. When in doubt, you can call the number located on the back of your flex card.
What can FSA dollars be spent on?
Your contributed funds can be applied to FSA eligible medical needs, supplies, appointments and even some procedures. For vision care specifically, FSA dollars can be used for:
Contact lenses and contact lens care
Eye care co-pays and deductibles
Check with your employer and FSA provider for more detailed information about what your FSA covers.
Is there a grace period for spending unused FSA money?
Although FSA funds are generally considered “use it or lose it,” some employers offer a grace period or FSA rollover option to spend unused FSA money after the end of the year.
The Internal Revenue Service (IRS) allows employers two options for FSA extensions. Employers can offer one of the following options or neither, but not both:
Grace period: Up to two and a half extra months to spend remaining FSA funds, after which any amount remaining will be forfeited.
Carryover: Roll over up to $550 of your unspent FSA funds into the next calendar year, under specific circumstances. Any additional funds (in excess of $550) will be forfeited.
Note: If you leave or lose your job, any unused contributions in your flexible spending account will stay with your employer and will not be refunded. However, if you have spent more than you have contributed, you will not be required to pay the balance.
To find out more about your flexible spending plan, contact your FSA plan administrator or your human resources professional at work.
Page published on Wednesday, September 18, 2019