With 2020 coming soon, you might be looking to use whatever money is left in your 2019 health-care flexible spending account (FSA) before it disappears. And while buying 100 tubes of toothpaste might seem like an easy solution, you have access to a host of other FSA-eligible items and services you may not know about.
Although your FSA might roll over some money or you may have a grace period of the first few months of 2020, experts suggest you work on spending some of those pretax dollars now while you can. Put your money toward smart purchases, they suggest, ideally the right ones for you. "If you're going to buy a bunch of stuff, make sure it's evergreen," says Jina Etienne, CPA member of the AICPA Financial Literacy Commission. "I'd rather have two years' worth of Band-Aids than six months worth of creams that expire in two weeks."
While you might need a prescription or letter of medical necessity for some of the more unexpected eligible items, you still have time to do your due diligence and make informed decisions. And you could find surprising options such as a Himalayan salt inhaler or microwavable stuffed animals that help your child sleep.
Here's how experts suggest you make the most of your year-end FSA spending.
Check with your employer to find out if your company offers either a rollover or a grace period. "Most people will have some sort of rollover, so they can roll over up to $500, so they're not in such a panic," says Steve Neeleman, founder and vice chair of health savings trustee HealthEquity. Otherwise, Neeleman notes, a grace period can typically last up to two and a half months.
Knowing the details of your plan could save you from rushing to spend your savings before you need to, like trying to cram in a last-minute doctor's appointment. "I practiced for 12 years as a surgeon and the last two weeks of the year can be incredibly busy," Neeleman says. "A lot of people have hit their deductible and they know they might as well get whatever done because it's paid for."
"I think of FSAs as a great way to use tax-free dollars to cover a wide variety of products and services," says Etienne. And while insurance plans are separated into medical, dental, and vision, you can spend your FSA on items and services in all these areas: "People see medical, dental, and vision as separate, and they don't see it as the broad spectrum of the things we spend our money on to maintain our health."
Etienne says there are a host of often-ignored FSA-covered items such as a 4-foot-long heating blanket, batteries for blood pressure monitor cuffs, a pocket-sized sensor for gluten or peanut sensitivity, and even microwavable stuffed animals designed to heat up so they can radiate a comforting warmth that helps children sleep.
Sydney Myers, merchandising specialist for the FSA Store, which sells 4,000 FSA-eligible products, says that while people oftentimes go for Band-Aids, sun care, and lip balm (with SPF 15 or more) for their year-end purchases, you have a lot more options than you might realize. Before you buy anything, check the details to make sure you won't need a prescription or a doctor's note for the expense to be eligible.
"One popular category is drug-free pain relief, which includes acupressure mats that go on the floor," Myers says. "They fall into the surprisingly eligible category. People will come in looking for a brace and find something like KT tape or cold packs."
Myers noted that the store's anti-nausea bracelets, called Blisslets, which are designed to help ease nausea from morning sickness or motion sickness, are also popular purchases — once people know to search for them.
If you're looking to try a trendy option, Myers notes that the company also sells a Himalayan salt inhaler, which is a form of vaporizer. She says new parents can get the most out of their account by checking out the Owlet Smart Sock 2.0 Monitor and Video Bundle, which streams video, and monitors a baby's heart rate and oxygen levels.
Etienne suggests hopping on your New Year's resolutions now. "One of the things that qualifies is a smoking cessation program," she says. "So don't wait until January to buy that program. Give it to yourself as a gift."
So instead of rushing to spend your FSA dollars, you can appreciate this new period of discovery. "If you're curious about acupuncture, go and explore it," says Etienne. "If there's anything you've always wondered about, I say try it."
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