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The flexible spending account, or FSA, is an extremely useful workplace benefit. With an FSA, you contribute money on a pre-tax basis to cover medical expenses for the upcoming year. That means the IRS can't tax the money you put into your account, and you get a dedicated fund to cover your healthcare needs, putting less of a strain on your savings account or budget.
There's just one problem with FSAs. Any money you have left over at the end of your plan year is money you lose (though some plans will allow you to carry over a small amount to the next year, or give you a little extra time to use your money in the new year). If you're still sitting on money in your 2020 FSA, at this point, you don't have a lot of time to use it up, so here are a few good ways to avoid losing out on that cash.
1. Renew prescriptions ahead of time
If there are prescriptions you take on a regular basis, renewing them ahead of schedule is a good way to deplete your FSA before the end of the calendar year. For example, if you're set to renew a 90-day supply of a certain pill in early January, see if your insurance company will approve that renewal at the end of December instead.
2. Move up medical appointments
Maybe your doctor told you to come back in early January to follow up on a health issue. If that provider has an opening the last week of December, you may want to move up your appointment, provided it won't interfere with your doctor's course of care. Similarly, if you've been putting off appointments till next year, you may want to rethink that plan and schedule them for December instead.
3. Get new glasses or contact lenses
If you have a bit of money left over in your FSA, why not treat yourself to a new pair of prescription eyeglasses? Prescription sunglasses count as a qualified expense, too. If you're not a glasses-wearer, you can instead order a batch of contact lenses to get you through the upcoming year. Contacts tend to have generous expiration dates, so it's usually not a problem to order them a year in advance of when you might need them.
4. Visit the dentist
When's the last time your teeth got a good cleaning? If you can't remember, you may be due for a dentist appointment anyway. Dental care is generally FSA-eligible, and if your dentist uncovers issues with your teeth, like a cavity, you can use your FSA to pay for those expenses as well.
5. Purchase health-related supplies and over-the-counter medications
Most years, you can only use an FSA to purchase limited medical supplies, like bandages and first aid items. But thanks to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), this year, as an FSA participant, you can use your leftover funds to buy over-the-counter medicines without a prescription. That means you can load up on pain relievers, allergy pills, and digestion medications. The only caveat here is that these drugs come with expiration dates, so you'll want to pay attention to those before buying in bulk. But often, you'll get at least a year's leeway, so even if you're good on pain relievers for now, it could still pay to buy a couple of bottles with your FSA.
Don't let that money go to waste
FSAs provide a lot of savings, but only if you actually use your funds. If you still have a balance to spend down for 2020, get moving now to avoid forfeiting the cash that's rightfully yours.