Nov. 29, 2022

This paid piece is sponsored by Avera Health.

Your flexible spending dollars for health care could disappear in a few weeks – but you have time to make sure they don’t.

Flexible spending accounts, or FSAs, are common among employer-offered health insurance programs. Employees can elect for health or dependent care expenses. Be careful: It’s easy to confuse FSAs and health savings accounts, or HSAs. HSAs pair with high-deductible health plans, letting you save pre-tax dollars for deductibles, co-payments, coinsurance and other qualified expenses.

“Since the investment you make in your FSA is pre-tax dollars, you can use these funds for qualified expenses all year long,” said Elizabeth Slack, JD, FSA/HSA benefits manager with Avera Health Plans and DAKOTACARE.

How FSAs save you money

People use health FSA programs for a smart reason: They save money. One example tax experts refer to is that if you put $2,000 in a health FSA account, you could save $600 in taxes, depending on your income and other factors. This example is based on someone earning $50,000 a year and who has a 30 percent tax rate.

Flex accounts come in several forms, such as:

• Health FSA.
• Limited-purpose FSA, a special form of account that’s compatible with an HSA for people signed up for a high-deductible health plan.
• Dependent care.

In 2023, the Internal Revenue Service has set the limits for FSAs and limited-purpose FSAs at $3,050, with a potential carryover of $610. The federal dependent care limit for 2023 is $5,000 per couple if they file together.

“The limits can change year to year, but the key consideration we recommend is communication with your insurance provider,” Slack added. “If you’re not sure where things stand, make sure you call them. Don’t delay.”

Slack said the 2022 rollover for a health FSA is $570.

How to put your funds to good use

People who have funds available can consider using that money for eligible expenses such as:

• Co-pays and deductibles for procedures, both inpatient and outpatient.
• Dental procedures.
• Vision care, eyeglasses and contacts.
• Hearing aids and medical batteries.
• Chiropractic visits.
• Insulin and diabetes testing supplies.
• Prescription and over-the-counter medications.
• Medical equipment such as crutches or blood pressure monitors.
• Weight-loss programs if they treat a condition diagnosed by a physician.
• Pregnancy and newborn needs, such as breast pumps and lactation supplies, prenatal vitamins and baby thermometers.
• Acne/skin care needs, including sunscreen.
• Menstrual/feminine hygiene products.
• First-aid supplies, such as bandages and antiseptics.

Another cash-and-carry use of flex funds is with the Avera Planet Heart program, a complete and affordable cardiac screening program. Or, you can get an array of tests such as a general wellness screen, lipid panel, thyroid panel, blood typing and more at Avera QuickLabs.

Mental health counseling as well as treatment for addiction or substance use disorder is another place your money can be put to use.

“You can address behavioral health challenges with your funds, but counseling doesn’t include marital or career advice,” Slack said. “Many people use FSA funds as partial payment for treatment programs too.”

You may need a letter of necessity from a health care provider for some expenses, such as special baby formula or forms of integrative medicine such as acupuncture.

Plan ahead to make purchases in time

Flexible spending funds are “use-or-lose” so check with your employer and provider about claim-filing deadlines and if there is a rollover available for medical funds.

“Sometimes it requires a little planning or consideration, but most people can find expenditures that would benefit them and not leave these valuable dollars unspent,” Slack said.

 If you aren’t sure about your FSA, contact the benefits experts at your workplace.