Friday, December 28, 2007

FSA: Use it or Lose it?

I have a medical expense FSA, or flexible spending account, set up through work. I use it mostly for co-pays at various doctor and dentist appointments, any medicine, and contacts. For 2007 I set it at $500, which turned out to be pretty close to my actual usage.

The thing that I don't know is whether or not I have to use the rest of the money - $64.15 - by December 31.

Because the money set aside for the FSA (or in my case, on a debit card) is not subject to payroll taxes, it has a coverage period or "plan year". In general, the plan year is the calendar year. However, in 2005, the IRS authorized an optional 2 1/2 month grace period that employers can offer, extending the "plan year" through March 15, 2008. I just don't know if my employer does this.

Seems like a little thing that I should easily be able to find, right? When my money is forfeit? I have already received my new FSA debit card for 2008 and my husband needs a new pair of glasses - if my 2007 FSA extended into 2008, then I could use that $64.15 towards the glasses and pay for the rest with the 2008 FSA. But I can't find anywhere the date my "plan year" ends. So I have to assume that it ends on December 31, 2007. I would rather use my money than forfeit it accidentally.

So today I bought 3 new boxes of contacts for us, as they won't expire for many years. Using a free shipping coupons I found online, the total came to $62.38, which leaves me with $1.77 left to use on my card. I just need to run to CVS and find something small to use the rest of it up!


Michelle Hardcastle said...

You can also get non-prescription medications with your fsa such as Tylenol, cough syrup, etc... So go stock up! Michelle

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