An item is FSA eligible if it is likely to be covered by a Flexible Spending Account (FSA). FSA funds can be spent on any health-related expenses that do not include your monthly insurance premiums. You have to spend your funds by December 31 every year. However, there are many creative ways to spend your FSA money you may not be considering.
Getting an FSA account is a significant perk of having a good employer. Unlike HSAs, which can act as long-term accounts, FSAs must be spent by the end of the year. This fantastic little perk can save you a lot of money on taxes and improve your health. Let’s take a closer look at what this offers.
What is an FSA?
An FSA is a Flexible Spending Arrangement. This is a special bank account that is dedicated to health expenditures that employers offer. Much like a 401(k), you can contribute to this account and your employer will match it. Unlike other accounts, there are limits to what you can spend on it. It’s important to know your FSA rules before you start spending.
FSAs are meant to be used exclusively for health-related expenditures. Thankfully, the FSA definition of health-related expenditures is pretty broad.
How do FSAs work?
FSAs are employer-made spending accounts where they allow you to contribute money you make before taxes are paid out on them. You get to save money on tax season, and you get to spend your money from your FSA on medical expenses. It’s a way to supplement the healthcare plan that you are given. Once the year on the FSA ends, the funds are eliminated or rolled over.
In a lot of ways, it’s just a simple savings account that you contribute to before taxes are taken out of your paycheck. Once there’s money in it, you can access the funds using a debit card or reimbursement process. When tax time comes, you save money by lowering your pre-tax income through FSAs.
They have “due dates” of either December 31 or March 31, depending on when the account is opened. If you have a March 31 due date, then you’re actually enjoying a three-month grace period. This is generally given instead of giving you the rollover amount allowed by the Internal Revenue Service.
Can you roll over your FSA money?
This isn’t actually up to you. In fact, it’s up to your employer. If you have a March due date, the answer is no. If you have a December due date, you might be able to.
How do you spend your FSA money?
There are several ways that you can get access to your FSA money. Some FSAs need a receipt to reimburse you for your expenditures, but in most cases, you will get a debit card that you can use to spend those funds. It’s best to refer to your FSA’s paperwork to find out how to access your funds.
Why do you have to spend your FSA money every year?
The problem with FSAs is that they are not meant to be a permanent savings account. The money that you and your employer contribute is meant to be spent in the short term. According to 2022 tax rules, only $570 of the money you contributed will be allowed to roll over into the new year after the due date hits on December 31. If you have a March 31 due date for your FSA, no money will be rolled over.
Around $400 million dollars will get forfeited annually because of people f0rgetting to spend that money. The maximum employee contribution for 2022 is $2,850. That’s a lot of pre-tax cash lost, not to mention a lot of opportunity lost to save on out-of-pocket health costs.
What can you buy with your FSA Money?
FSA money is meant to cover anything that does not include insurance premiums. So, that leaves you with a lot of different options. If you are unsure of whether your FSA will cover something specifically, then you should look at the paperwork that came with it.
If you have FSA contributions that are high, the world is your proverbial oyster. Let’s take a look at some of the best ways to spend your FSA money this year.
Creative ways to spend your FSA money before the deadline
1. Copays and prescriptions
Without a doubt, copays, deductibles, and prescriptions are some of the most popular ways to spend your FSA money. So if you have a prescription, need to go to a doctor for acne medication, or want to pick up some prescription medication for your allergies, now would be a good time to do it.
On a similar note, you don’t always have to spend money on prescription medications if there is an OTC version. FSAs now allow you to use them for over-the-counter medication as well.
2. Prescription eyewear
Do you need reading glasses? Maybe you don’t need reading glasses, but you want to have some cool prescription glasses that help you see better from a distance. Or, maybe you want to get prescription sunglasses. You can get reimbursed from your FSA account for anything related to prescription lenses—and yes, that includes contact lenses.
3. Alternative medicine
Did you ever want to try acupuncture or maybe need to go to a chiropractor? Now would be a good time to do that. FSAs allow you to use their money for alternative medicine as long as it is something related to your health. Even hiring a trendy dietician or buying a snazzy acupressure mat would fit under this bill.
4. Acne treatments
Suppose you are one of the many adults who either suffers from acne or has kids who suffer from acne. In that case, you will be happy to know that dermatologist visits, acne medication, and facial cleansers can all be covered with FSA funds. Prescriptions last for a year, so if you need more, you should load up now.
5. Shoe inserts
If you spend a lot of time on your feet, why not give them a treat? The FSA Store has plenty of shoe inserts that you can choose from. If you have specially-made inserts from your podiatrist, then those are worth a reimbursement from your account too. On a similar note, you might be able to get compression socks and specialty shoes using FSA funds too.
6. Diabetes insulin
You can now get insulin with FSA money without a prescription being required. If you or a family member has diabetes, this could be the best purchase you can make. You can never have too much diabetes medication, nor can you have too many extra vials of insulin.
7. Baby food
Certain baby food subscriptions, such as Ready, Set, Food!, are actually cleared for FSA fund usage. The difference between this food and others is that this is a program designed to help reduce the risk of food allergies in babies and toddlers. Food subscriptions with these traits can be considered FSA-friendly.
8. Dental work
If you need to have a dentist appointment, now would be the time to make sure you get it done. Dental appointments can be covered by FSAs, and that includes copays that your dental insurance requires. Dental accessories such as teeth whiteners, denture protectors, and mouthwash can all be purchased from Amazon or the FSA store.
9. Vitamins and supplements
Vitamins and supplements are both generally covered by FSA money since these are taken to improve one’s health. This is a particularly good time to stock up, simply because vitamins last for years and you will be able to order them directly from the FSA site.
It’s important to recognize that vitamins, supplements, and other stuff that is considered to be OTC needs a prescription if you want to get them through FSA funding. Thankfully, many websites have a “fast track” prescription method to ensure that you get your reimbursement.
10. Intimate care
As adults, we all have certain needs that need to be taken care of in terms of reproductive health. If you are a woman, you should be happy to know that you can get feminine products (like menstrual cups or Midol) with your FSA account. Men can celebrate knowing that condoms, personal lubricants, and even certain male aids can be covered by this.
Oh, and if you are trying to conceive, there is even more good news. Fertility treatments and pregnancy tests are both covered. (So are prenatal vitamins!)
11. First aid kits
Every home should have a first aid kit as a part of its basic accessories. First aid is the medication, bandages, and tools you use when you have a small accident at home. Most people would be wise to buy a first aid kit from the FSA store if they haven’t already. If you used items in the kit, make sure that you have them replenished.
How much can I have in my FSA?
As long as you intend on using your FSA contributions, there is no reason not to maximize your contribution. This is pre-taxed money, which means that it can help lower your tax bill by April 15.
If you have maxed out your FSA, you can enjoy the maximum amount of $2750 per year, per employer. If you are married, you partner can have their own FSA with a maximum of $2750.
What Does FSA Eligible Mean – FAQs
Can I withdraw money from my FSA at an ATM?
You technically can withdraw money from an ATM with an FSA card, but you need to keep documentation showing that it was used to pay off medical expenses. For example, if a copay can only be paid in cash, you may need to withdraw money from your ATM.
Can I pull money from my FSA?
Once the money is in your FSA, it’s in there and can only be used to pay off medical expenses. If you try to remove money from your FSA for other expenses, you won’t be allowed to do so. With that said, you can spend the money in your FSA whenever you want.
Can you buy food with FSA card?
You can buy allergen-introducing baby food and specialty foods that are part of a medical regimen in certain situations. The best thing you can do with this option is to talk to your HR representative so that you can come up with a solution that fits your bills.
Can I use my FSA for gas?
Unfortunately, buying the gas to get to your doctor’s appointment is not an adequate use of your FSA funding. You have checking accounts for that. (Did you know we have a list of the best checking accounts, too? Click here for details.)
What does FSA eligible mean at CVS?
When you shop at CVS and other pharmacies, you may have noticed products marked as FSA eligible. Sometimes these products are marked with an “F” on your receipt. The FSA-eligible means that if you use an FSA debit card for purchasing over-the-counter health-related products or for your prescription co-payments, CVS will automatically charge FSA eligible items to your FSA debit card.
- FSA accounts are meant to cover virtually any and every expense that does not involve insurance deductibles.
- You can spend FSA money on glasses, prescription medications, copays, as well as health treatments not covered by insurance.
- FSA money needs to be spent by the due date.
The bottom line is plain and simple. If you have money in your FSA, the best thing you can do is spend it on the daily things you need, copays, and prescription medications. There are always ways to find a way to spend your money. At the very worst, you can always hit up the FSA store.
If you are looking to find a way to save money during tax time, the best way to do it while feeding your need for healthcare is to ask your employer about FSAs. Many employers will have a savings account system that is already set up and approved for FSA use.
Need something a little more generic? Having a solid health account is great, but at times, having a savings account that is there for your emergencies can be just as good. Check out our listings for top rated accounts here.