With everything that’s been going on, it’s easy to procrastinate, but the clock is ticking. October and November flew by, and before you knew it, you were looking down the barrel of a new year. Even knowing that time was running out, you still didn’t manage to use all of your FSA or HSA dollars.
You don’t want to end up as a statistic, do you? Every year, Americans lose 14% of the dollars they contributed to their Flexible Spending or Health Savings Accounts.
Just a few years ago, you would have been out of luck, but new rules for HSA/FSA plans came in last year that make Flexible Spending dollars even more flexible.
New federal guidance permits employees to carry over unused amounts of up to $500 into the following year, and many programs provide a grace period after the year ends to use remaining funds for qualified FSA expenses. The new options look like this:
Option 1: Carryover
If an FSA plan includes this option, employees can carry over up to $500 of unused FSA savings to the next year.
Option 2: Grace Period
If a plan includes a grace period option, employees have an additional two-and-a-half months (until March 15th) to spend their unused FSA dollars. However, this option cannot be combined with option 1.
Option 3: Run-out Period
If a plan includes a run-out period, it gives the employee more time after the year-end deadline to submit reimbursement requests for eligible expenses. Those expenses must have been incurred during the plan year. The run-out option usually extends submission deadlines out to March 31st.
Time is Running Out
Your FSA money can still be used, and it will cover vital services such as orthodontics, cleanings, and even Invisalign.
It’s a smart idea to use your tax-free money to cover healthcare costs you were going to pay out of pocket. However, it gets even better; using your FSA to cover these costs might actually reduce your overall costs by as much as 40%.
You may have thought you were out of time and that your FSA surplus had gone down the drain. It’s not so! You can prevent the loss of your 2015 funds by using them now toward dental care.
~Dr. Marea White