Types of Flexible Spending Account (FSA)
This type of Flexible Spending Account typically combined with a high-deductible insurance plan to cover expenses not covered by the policy. This type of FSA can be used to pay your deductible or your co-pay for covered care. You can also use a Medical Expense FSA for dental care, chiropractic treatment, vision-related care, medical devices and even over-the-counter medications.
Funds from a Dependent Care Flexible Spending Account can be used to cover costs relating to minor children under the age of 13 that are living with you. Dependent Care FSA funds can be used for daycare supervision for children of working parents. In some cases, Dependent Care FSA funds can also be used to pay for the care of elderly relatives who live with you as well.
Companies that do not offer health insurance for their employees can offer Health Premium Flexible Spending Accounts to substitute. Employees can use funds from Health Premiums FSA to cover health insurance premiums. Another alternative is that one member of a family can obtain a family healthcare plan to cover his or her entire family, allowing the other spouse to open an FSA account for his her health-related expenses.
Adoption Assistance Flexible Spending Accounts allow would-be adoptive parents to use the funds to offset some of the sometimes-staggering expenses associated with a legal adoption. These pre-tax funds can be used for any legal expenses associated with adopting a child. The existence of Adoption Assistance FSA funds allows many parents who would not otherwise be able to afford the costs of adoption to do so.
Use It or Lose It
Ideas for Spending Down Your FSA
It is up to you to ensure that you do not leave Flexible Spending Account funds on the table. If you have FSA that does not permit rollovers or have a grace period, now is the time to begin thinking about how to disperse the funds. While your options for spending down Dependent Care and Adoption Assistance FSA funds may be limited, you have somewhat more latitude if your money is in a Medical Expense or Health Premium FSA.
If you have a Health Premium Flexible Spending Account and you can afford to do so, consider paying ahead on your premiums for next year. Be sure that your FSA and your insurance plan allow advance payments before doing so, however. For possible ways to spend down funds from a Medical Expense FSA, consider health-related expenses that you might have put off from earlier in the year.
For instance, if you haven’t already had one, now is an ideal time to have a flu shot — and pay for it with funds from your Flexible Spending Account. If you have not yet scheduled an annual physical or dental examination, now is a good time to do so. If you have had a physical but you are feeling specific aches and pains, inquire with your primary care physician about a referral to a physical therapist, massage therapist or acupuncturist. If you simply cannot think of eligible expenses, have a discussion with your physician or health care professional anyway. He or she may be able to suggest possible eligible expenditures that you never considered.
Remember, medical devices are also eligible for payment through FSA funds. The end of the year is an ideal time to take an assessment of the condition of your medical devices and replace them if needed. Do you have a physician-recommended humidifier? Do you use catheters? Do you wear glasses or contacts? Why not pick up an extra pair of eyeglasses, or a few spare pairs of contact lenses and contact lens solution?
This article was written by staff writer Audrey Henderson. Her mission is to help fight your evil debt blob and get your personal finances in tip top shape.