The holiday season brings with it so many enjoyable events—from family gatherings to holiday shows, kids programs, and athletic events (college football!). With all the activities of the season, it is easy to forget about the “use it or lose it” rules of your FSA plan.
It would be a shame to wake up on January 1st ready to enact your New Year’s resolution only to realize you forfeited funds that could have paid for your Smoking Cessation or Weight Loss program, so I’ve decided to give you a short list of the uses and a synopsis of the consequences of non-use early in the holiday season!
1. Use it or lose it; This means exactly what it says. Any monies pulled out pre-tax and placed in your FSA accounts will be forfeited if not used by the end of the plan year (usually Dec 31).
2. Taxes; While there can be a substantial savings in payroll tax by using FSAs to pay for qualified expenses, there is also the chance for loss. It is imperative that you use all of the funds in your FSA or you will suffer additional tax burden. This is how it works. Any funds left in your FSA will not only be forfeited, you will be responsible for payroll taxes on the forfeited amount!
1. Medical expenses
a. Deductibles; You can generally use your FSA to cover your deductibles/co-pays
b. Dental; Many people opt out of dental insurance because the cost benefit ratio rarely makes sense. Use your FSA to pay for your cleanings, maintenance, repair, etc.
c. Vision; Need new glasses? Contacts? Use some of that FSA money to purchase them!
d. Weight loss; If you have any disease that can be treated or improved by controlling your weight, you can use your FSA to pay for it! (Diabetes, Hypertension, Obesity, etc)
2. Dependent care expenses
a. Child care
b. Adult care
For more detailed information please go to the IRS website.
If you are looking to control or lose weight through the holiday season or as a New Year’s resolution, give us a call and we will guide you through the process and you can pay with your FSA, HSA or MSA. 855-436-3849.
Craig A Long
Chief Executive of Sales