Holiday cheer is in the air and twinkling lights may be appearing in many towns. While this may be a time of back-to-back holidays, it’s also a great time to reevaluate your employer benefits and figure out how to spend your Flexible Spending Account (FSA) money before the end of the year. 

United States (U.S.) workers leave nearly $400 million in FSA funds unspent each year and unless your employer offers an extension to the December 31st deadline (for calendar year plans) there is no recovering that money. 

Why sign up for an FSA in the first place?

Flexible Spending Accounts are pre-tax accounts set up by employers on behalf of their employees to help cover qualified medical expenses throughout the year. Employees can choose an amount, up to $2,750 for plan year 2021, to be taken out of each paycheck based on their estimation of annual out-of-pocket expenses. While FSAs help employees save money on qualified expenses, the money contributed to an FSA must be used by the end of the year or you risk forfeiting the funds. 

Types of expenses that are FSA eligible

FSA funds can be used to purchase items or pay for qualified out-of-pocket medical expenses for you, your spouse, or your dependents.

Here’s what you need to know:

  • Health FSA can be used for qualified health care products and services like acupuncture, pain relievers, bandages, eye exams, x-rays, and yes, even your co-pays.
  • Limited-Purpose Health FSA can be used for various dental and vision-related items like contact solutions, denture cleaners, alignment devices, even mileage from dental and vision visits. 

Even more ways to spend your FSA money

If the medicine cabinet and dental checkups are complete, there are other creative ways to spend FSA money on items that you’ll use year-round. In addition to the commonly purchased FSA eligible items, here are some items that may surprisingly be covered by FSA funds. 

Basic health needs

  • Rather than running to the store — think pain relief medications—there are certain items that you may want to always have on hand. Most over-the-counter (OTC) medications are covered by FSA funds and it doesn't hurt to have a small supply on hand to get you through unexpected illnesses. 
  • Depending on what part of the country you live in, a bottle of sunscreen may last years. But using it past its expiration date can be risky. Be sure to check the date on your current bottle and stock up for that holiday getaway vacation.
  • If your vision hasn’t changed but your style has, you may be able to get a new pair of glasses or perhaps prescription sunglasses just in time to kick off the start of a new year.

Multi-use and emergency needs

  • Accidents happen. Whether it’s a cut on your hand from a rogue knife peeling a potato or a kid slipping on the icy front porch, having a fully stocked First Aid Kit may be a smart buy for many and one usually covered by FSA funds.
  • Another item you can save yourself a trip to the store for are menstrual and feminine care products. Keeping a supply on hand helps to avoid an emergency trip to the store in the middle of your day or an important event.
  • Whether you're trying to expand your family or you have a newborn in your arms, FSA funds may also be used for things like pregnancy tests, diaper cream, a better breast pump, and all the everyday items that keep mom and baby healthy and happy.
  • No matter if you’re just trying to look great in the new year or you’re actively working on getting healthier, certain health tracking tools to monitor your progress may also be covered.

Save money all year, spend it down now

FSA accounts are a fantastic way to help employees manage annual medical spending and reduce surprise out-of-pocket expenses. But if you blinked and found yourself about to close out 2021 without thinking about your FSA, now is the time to make a list and check it twice, and don’t forget the receipts.

Whether shopping for your famous cheesecake recipe or online gathering gifts for loved ones, be sure to remember to include items that ensure your hard-earned pre-tax money doesn’t get thrown out with the fruitcake. 

How PrimePay can help

PrimePay helps with the administration of pre-tax benefits for your company, including HRAs, HSAs, and FSAs. When you choose PrimePay’s pre-tax benefit plan administration, you receive a dedicated service team, access to our support portal, automated claims processing, and a PrimePay debit card and mobile app. Click here to learn more.