Collectively, workers may have forfeited an estimated $1 billion in their health-care flexible spending accounts last year.
Yet depending on your employer’ s rules for those FSAs, which let workers save pre-tax money to pay for qualifying health expenses, you may have sidestepped being part of that cohort — at least for now.
While 23% of companies that offer health-care FSAs stick to the Dec. 31 “use it or lose it” approach, the remainder either offer a grace period to spend leftover funds or let you carry over a limited amount into the next year, according to the Employee Benefit Research Institute.
More from Personal Finance:
How to reduce the financial sting of home maintenance, repairs
It’s time in order to boost your 401(k) contributions for 2023, experts say
These are the particular states that are raising their minimum wages in 2023
However, if you’re allowed to carry more than 2022 money, the limit is $570. And if a person get a grace period, it can be up to 2 . 5 months, which would mean the new deadline of March 15 to invest the cash.
Nevertheless, some employees end up losing out despite those reprieves.
Among workers who are allowed to carry over money, 49% finish up forfeiting all or even part of this, based on the institute. For those with a grace period, that will share is 37%. Additionally , 48% with a traditional Dec. 31 deadline day forfeit cash, as well.
Last year, individuals could have contributed as much as $2, 850 in order to their health-care FSA. The limit with regard to 2023 will be $3, 050.
Look into your workplace FSA guidelines
It’s common regarding workers to not know what their employer’s FSA rules are. If you’re uncertain, reach out to your own company’s human resources department, said Jake Spiegel, research associate at the institute.
Alternatively, you can check your online FSA portal (if your company has one) for information. There also should be a phone number (for customer service) on the particular back of your FSA debit card that you can call.
Ways to spend down your FSA balance
If a person discover you’ve only got a couple of weeks to spend remaining 2022 funds and are unsure how to use it, be aware that the list associated with eligible costs that qualify for FSA money is longer than this once was, due to congressional action in 2020.
For starters, over-the-counter drugs no longer need a prescription to qualify. This includes things such as cold medicines, anti-inflammatories and allergy medicine.
In addition , menstrual care products are now eligible, as are usually items that have become pertinent during the particular pandemic : at-home Covid tests, masks, hand sanitizer and other personal protection equipment used to combat the virus.
“Think about what sorts of otc medicines or other things you can pick up that you’d buy anyway, ” Spiegel stated. “That can help people draw down some of their balance. inch
Other products that qualify include sunscreen, thermometers, eye-care products, baby monitors and pregnancy tests. FSAstore. com has a list of eligible items if you are unclear whether something would be eligible.
Be aware that the IRS does not allow stockpiling , which generally means you can’t buy more of a product at one time than you can use in that tax 12 months. The specifics, though, are determined by FSA administrators.