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Making the Most Out of Your Flexible Spending Account (FSA) Before the End of 2024
An FSA is an employer-sponsored benefit that allows employees to contribute a portion of their paycheck into a special account that can be used for qualifying medical expenses. The contributions are made on a pre-tax basis, reducing your taxable income and, therefore, lowering your overall tax liability. For 2024, the IRS has set the contribution limit for health care FSAs at $3,200. As we approach the end of 2024, it’s essential to know what an FSA can be used for and how to ensure you maximize its benefits.
Eligible Expenses
FSAs cover a wide range of medical expenses, offering significant flexibility in how the funds can be used. Common eligible expenses include:
- Medical services: Co-payments, deductibles and treatments not covered by insurance
- Prescription medications: Costs of prescribed drugs and medical supplies
- Over-the-counter medications: Certain over-the-counter medications, including pain relievers, cold and flu medicine, feminine hygiene products and allergy medicines
- Vision: Eye exams, glasses, contact lenses and solutions, and even LASIK surgery
- Hearing: Hearing exams, hearing aids and batteries
- Dental: Orthodontic and other dental treatments not covered by insurance
- Medical equipment: Items such as crutches, blood pressure monitors, breast pumps and insulin pumps
- Mental health: Therapy sessions, counseling and psychiatric care
If you’re not sure if an item is FSA-eligible, check out the FSA Store to be sure.
Strategies to Maximize Your FSA
The end of the year is the perfect time to review your FSA contributions and spending to ensure you maximize your benefit. Here are some tips to help you make the most of your FSA before the end of 2024:
1. Review your remaining balance
Check your current FSA balance to understand how much money you have left to spend. FSAs have a use-it-or-lose-it policy, meaning any unspent funds at the end of the year may be forfeited. Many employers’ plans allow participants to carry up to $640 into 2025; however, anything additional will be lost.
2. Schedule necessary appointments
If you have been postponing medical or dental appointments, now is the time to schedule them. Routine check-ups, dental cleanings and vision exams are all eligible expenses that can help you utilize your FSA funds.
3. Stock up on medical supplies
Consider purchasing essential medical supplies that you may need soon, such as bandages, thermometers and first aid kits.
4. Refill prescriptions
Ensure that your prescription medications are up-to-date and consider refilling them. This is particularly useful for the medications you take regularly.
5. Invest in health and wellness
FSAs can cover a range of services that contribute to your overall well-being, such as physical therapy, chiropractic care and acupuncture. Investing in these services can be a great way to use remaining FSA funds.
6. Take advantage of vision and dental services
Vision and dental services are excellent ways to utilize FSA funds. Update your glasses or contact lenses, get a new pair of prescription sunglasses, or have necessary dental treatments.
7. Save receipts and documentation
Keep all receipts and documentation for your FSA purchases. This not only ensures you have proof of your expenses but also helps you track your spending and balance.
By carefully reviewing your FSA balance and making informed decisions about your eligible expenses, you can maximize the benefits of your FSA and avoid forfeiting any funds. Take advantage of the remaining time in 2024 to invest in your health and well-being, ensuring that you make the most out of your Flexible Spending Account.
The Oswald team can help you determine your benefits needs for next year. Please contact us below or learn more on our Employee Benefits page.
