Flexible Spending Accounts (FSAs) offer employees a valuable opportunity to save money on eligible medical and dependent care expenses. However, navigating the ins and outs of FSA spending can be a bit tricky. In this blog, we’ll explore some smart strategies to help employees make the most of their FSA funds and maximize their savings.
Every dollar has a job
FSAs are usually funded from your paycheck. If your employer offers an FSA, you’ll get the option to sign-up during open enrollment. You can typically elect an annual amount to contribute, which your employer will then distribute over each paycheck. You could also consider a per-paycheck contribution that fits within your monthly budget.
Spend those hard-earned FSA dollars productively and sensibly.
There are plenty of FSA and Dependent Care FSA (DCFSA)-eligible ways for you to create a healthy and happy year for your kids, and help you save cash along the way.
- Make doctor’s appointments now for you and your family.
You can use your FSA for copays or prescription costs. - If you’re back to work, check out care options or day camps for children*.
Day camps can include anything from sports camps to STEM camps. You might be able to use your dependent care flexible spending account to pay for it. Depending on your tax bracket, you could save 20% or more on summer camp expenses since you do not have to pay taxes on DCFSA-eligible expenses.
There are a few rules for using DCFSA funds to pay for day camps so review your plan highlights.
*Consideration: Kids under 13 years old are eligible and the parent needs to be working full-time, in school full-time, or trying to find a job. In other words, stay-at-home parents can’t use a DCFSA to pay for day camps.
Put your benefit dollars to GOOD use!
With many eligible items available, you’ll be prepared for whatever comes your way during the summer. Interested in shopping online? No problem! Visit our partner, the FSA Store.
Remember you can use your Beniversal debit card online and in-store at pharmacies and other approved retailers. And if you’re traveling, don’t leave home without it!
Pro Tip: Keep your receipts, paperwork, and other related documentation. You may need them to file a claim for reimbursement.
Plan Ahead
One of the key principles of smart FSA spending is planning ahead. Unlike an HSA, you cannot carry over all of your balance indefinitely. So, it’s essential to be careful about how much you choose to contribute to this account during the open enrollment period. Trust us. Don’t wait until December to spend your funds. You won’t be a happy camper.
Spending deadlines for FSAs vary, (depending on how your plan is set up. Check your plan highlights for specific details). The primary challenge with FSAs is the risk of forfeiting any unused funds at the end of the plan year. This “Use It or Lose It” rule can be a source of stress for many individuals, but with careful planning, it’s possible to navigate this dilemma effectively.
Being smart about FSA spending involves careful planning, tracking expenses, and taking advantage of eligible items and services. By understanding your FSA, planning ahead, and making informed choices, you can make the most of this valuable employee benefit. Don’t let your FSA funds go to waste – prioritize your health and financial well-being with these smart FSA spending tips.
