Saturday, December 3, 2011

Use It or Lose It

The end of the year has us thinking about the very un-Christmas-y topic of flexible spending accounts. Because we overestimated the cost of some dental work we needed done and of prenatal care, my husband and I have about $250 we need to spend on health-related expenses before the end of the year or else we lose the money.

In the past, I would use our end of the year FSA money to stock up on over-the-counter medication for the next year. Unfortunately, the FSA rules changed this year and you have to have a prescription for OTC medicines if you want to use FSA money on them. Lame. Fortunately/unfortunately, we've also never had this much money to use up before either.

In researching what I could use the money on, I came up with some interesting ideas and great resources. While you can't use FSA money for massages (again, lame), if you need relaxation you can use it for acupuncture and chiropractic care. You can use FSA money for birth control pills or condoms, and if that isn't your bag, you can use it for ovulation kits and pregnancy tests. While you should check expiration dates, this is the time to be thinking about stockpiling for the year. Sunscreen, bandaids, contact lense solution, and the aforementioned condoms and pregnancy tests can be bought in quantity and used throughout the upcoming year. This is also the time to go ahead and replace your reading glasses, neti pot, shoe insoles, humidifiers, and the like.

As I get ready for this baby, I plan on using the bulk of our remaining $250 for supplies the baby will likely need. Thermometers, breast pumps, nursing pads, nasal aspirators, and absorbent bed pads are all FSA eligible. (Tip: Infant bed pads and pet weewee pads are the same thing. Look for them with incontinence supplies rather than in baby care or pet care. Thinking outside of the box pays off in situations like these.)

You could also think of this as an opportunity to buy some stocking stuffers. Denture cleanser and adhesive may be appreciated by a grandparent on a fixed income. Your althletic cousin could maybe use another ace bandage and a wrist or knee brace. If you have a sibling who loves to camp, why not get him/her a first aid kit and blister pads? I plan on getting my always-too-hot husband a Chillow. (He had one before and loved it so much he wore it out.) It would also be a good gift for your menopausal mom.

I'm not being compensated to say this, but I've found the FSA Store and the FSA section of to be extremely helpful in coming up with ways to spend my remaining FSA money. Both websites accept FSA credit cards, which prevents you from having to submit a claim form and saves you a step. Amazon, in my experience, does not accept these cards.

While I am glad we won't lose the money we put into the FSA, I wish we hadn't allocated so much. We've corrected this problem by seriously reducing our election amount for next year, with the knowledge that with a "qualifying life change", like getting married, or in our case, having a baby, we can increase our election amount.

Do you participate in a FSA? If so, how do you decide on an election amount?


  1. Okay, so I've seriously never heard of FSA, but I am VERY intrigued after reading this! Is this like instead of health insurance?

  2. I'm sorry I assumed everyone knew what these were. It's an optional supplement to most health insurances used to pay for out-of-pocket expenses that insurance doesn't cover with pre-tax dollars. I think they're sometimes they're called cafeteria plans.

    To give a mundane example, you can use your FSA to pay for your co-pay at the doctor's office. Your insurance pays for the doctor's visit, but you can use you FSA to pay the $15 or whatever your out of pocket expense is. Because you're using pre-tax dollars, it's like getting a 20% discount (or whatever your tax bracket is.) You can also use your FSA for some things that insurance doesn't cover like the things I mentioned in the post or even big things like fertility treatments.

    They also have special ones that you can use for dependant care expenses, which you should totally look into. They help pay for things like daycare and babysitters. Ask human resources at your school.

    The catch with these plans is that you elect an amount for the year (I think the maximum is $5,000 but I don't think there is a minimum) in November and a little is set aside from your paycheck each month for the next calendar year. To make the math easy, let's say you elect to set aside $1200 a year. Each month, $100 will be withheld from your pay and you'll be taxed on the remainder of your salary. With most plans, you can use the whole $1200 in January, even though you haven't had all the money taken away yet. That's good if your kids need braces or something expensive. But if it's December 31 and you've only spent $1000, you lose the remaining $200. Then you cry.

  3. We have the same problem this year! Except I have about $700 of the $1000 I had set aside! I found really cheap contacts, they lowered the copay for my prescriptions and hubs hasn't bought his contacts yet. I'm going to buy prescription sunglasses but your ideas about the FSA store are definitely helpful! I'll have to check those out.

  4. Gucci prescription sunglasses, I hope.


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