What is a Flexible Spending Account?

Medical expenses can be overbearing and expensive. The IRS provides the Flexible Spending Account option, whereby you can transfer some of your money to your FSA before it is taxed to help you cater for such expenses. This saves you out-of-the-pocket expenses, decreases your tax obligation, and increases your spendable income.

With an FSA, there is no rollover of funds, unlike a Health Spending Account (HSA). Technically, with an HSA, you have more control over your contributions than with an FSA. However, FSAs have unique benefits that set them apart from HSAs.

Now, with this in mind, let's focus on the crux of the matter. When saving money through your FSA, you must state how much you want to save from the onset. The 2022 limit is $2,850 per individual. At the beginning of your contributions, your account is fully loaded with the total amount for the whole year. If you do not exhaust this money, it cannot be rolled over to the next year, even if you have spent zero dollars. We don't want losses, do we? So how do you ensure that you completely use up this balance?

How to use up your Flexible Spending Account balance

Go get that dental check anyway.

Or any other health check in that case. Schedule your appointment with your dentist before the year ends. Even though some FSAs have a two and a half months grace period, taking advantage of making important visits to your doctors even before the period ends is a step in the right direction.

If your kid complained about a migraine even once, take them to the hospital to get checked. There might be some humor in this, but the severity of health issues is always important. And what better way than having money tucked away somewhere for such essential visits?

Stock up on the medical items you need

We have to agree here; it's not like we are predicting doom. We are simply taking advantage of what we have to help us with what we don't. Buy feminine hygiene products. If you are a skincare guru, invest in creams, cleansers, and serums for your beauty regimens. This works if what necessitated this is a skin condition, such as medically-proven acne.

Or you could stock up on Over-The-Counter (OTC) drugs that are commonly used in your household. You are required to provide proof of these expenses by sending receipts. You could also confirm with your doctor if you could stock up on extra medicines you normally take. While this may be a tough one to ask, considering how prescription drugs can be adversely used in excess, try consulting. All the money you use for this will be reimbursed to you.

Upgrade your vision

You will probably notice people changing their contacts or prescription eyeglasses a little too many times. And you would wonder where they get all that money from. While some may be authentically able to change optical tools as much as they want to, others are using up their FSA balance.

The key idea with using up your FSA balance is to stock up on anything medical-related. You will need eye drops; buy them—the highest quality, in fact. You will also probably need new contacts or a better saline solution; buy them right after you visit your optician.

Shots, shots, shots!

Immunizations can be expensive. For kids, the Affordable Care Act has a provision that states that all childhood immunizations should not be covered out-of-pocket. Since the government helps pay for almost half of these childhood vaccinations, the prices have skyrocketed compared to the standard decades ago.

Most vaccine producers exploit their monopoly or charge for the vaccine's effectiveness. This is why you should get all your immunization shots before the year ends. If your child has some remaining to go that should be done during that year, have them take their shots before the year ends.

Take advantage of the FSA Store.

The FSA store, and the Amazon FSA Store, both sell medical items that are FSA-eligible. This saves you the trouble of buying ineligible products and then requesting reimbursement.

Other alternatives

There are numerous ways you can use up your FSA balance. Here are the others:

• Any other procedures you have been postponing
• Chiropractic services.

• Dependent care: As long as the parents are earning income, looking for work, are disabled, or are in school full-time.
• Diabetic drugs and supplies include insulin shots, pumps, blood sugar meters, and test strips.
• Birth control and family planning products.
• Medical workshops that you attended. It must be related to a medical condition from which you, your spouse, or your qualifying dependent are suffering. You will also get reimbursement for the places you stayed during these conferences.
• Sunscreen.
• Special education.
• Weight-loss programs.
• COVID-19 tests and PPEs.
• Acupuncture.
• Foot care, such as foot rollers, shoe inserts, and arch braces.
• Bandages, thermometers, and first aid kits.
• Pregnancy tests, baby monitors, breast pumps.
• Air quality products, such as air purifiers, air filters, and air conditioners. Consult with your medical doctor about whether purchasing these items will improve your quality of life. Since most of them know that you are just trying to use up your FSA balance, most will agree to their purchase. This will mean that you are liable to be reimbursed by your FSA.
• DNA testing kits.
• Nicotine patches if you are struggling with smoking addiction.

Closing thoughts

While some employers will allow their employees to roll over $500 in FSA balance to the next year (about less than half of them), employees would do well to consider coming up with creative ways to spend their balance. Federal rules limit employers from providing their employees with both this option and the grace period option; it's either one, but not both. This being said, it is clear that the odds are against you using up this balance.

We have outlined numerous ways to use up your balance to the last dollar. Use this as your checklist; have you visited your dentist lately or bought that neck relaxer your doctor said you need?

Be as ingenious as you can be, all along the rules, of course.