Like many of you, we have a Flexible Spending Account (FSA) that allows us to pay qualified healthcare expenses using tax-free money. (Did you know that FSA money is also exempt from payroll taxes in addition to income taxes?) I still think the idea of guessing your future healthcare expenses in a use-it-or-lose-it system is illogical at best, but it is what it is. (In 2012, there was talk from the IRS that this policy might be changed.) We recently even got one of those FSA debit cards so at least we don’t have to deal with faxing in receipts when purchasing from approved merchants.
If you didn’t exhaust your funds with insurance copays or deductibles, here’s a quick guide to using up all that cash. First, I should say that some plans allow a grace period until March 15th of the following year as opposed to a December 31st deadline to use your 2012 funds, so confirm with your FSA administrator.
The go-to product used to be buying over-the-counter drugs like cough medicine or painkillers. Effective January 1, 2011, the cost of over-the-counter medications became no longer eligible unless the medication was prescribed by a doctor. Keep this in mind and ask for a prescription for any OTC drugs you buy on a regular basis. Don’t forget, Target and Walmart now offer 30-day supplies for $4 and 90-day supplies for $10 on many generic drugs that are also packaged under over-the-counter labels.
FSA Items Still Available Over-The-Counter Without A Prescription
- Eye care (contact lenses, solution, drops)
- First aid supplies (bandages, gauze, tape) for emergency kits
- Family planning products (birth control, pregnancy tests)
- Home testing aids (blood pressure, diabetes, thermometers)
As a reference, I usually check the well-organized lists from health insurers like Aetna or third-party FSA administrators like Conexis. In addition, just about every online drugstore (Drugstore.com, CVS, Walgreens) now has a special FSA-eligible section, but some still include items which now require a prescription under the the new regulations (look for FSA vs. FSARx).