Some employers offer a tax benefit called a Flexible Spending Account or Flexible Spending Arrangement (FSA). Basically, money is deducted pre-tax from each paycheck and held in an account by your employer. If you incur a qualifying medical expense, you can then get reimbursed out of that account. You decide how much to deduct from each paycheck, up to $5,000 in a year, and if you fail to use up the money within the year, it reverts to your employer.
After the unexpected hospital stay in 2009, which quickly exhausted the funds in our FSA, we went a little overboard in 2010, figuring that we could use any extra funds to buy new glasses or do some necessary but not urgent dental work. While FSAs traditionally run from January 1 to December 31, some employers provide an extension of benefits into March of the following year. For us, the deadline is March 15.
And so I’ve found myself scrambling, because for some reason, I’d thought it was March 31. And I’ve put things off, because I thought we might be getting a somewhat hefty bill related to a procedure that was done last year. But that bill is still being sorted out – it’s possible we won’t have to pay any of it, and it’s unlikely that it will singlehandedly exhaust the remaining funds in our FSA. So I just realized yesterday that we have six – now five – days to use up the FSA money.
Fortunately, our eye doctor was able to fit us in today. I explained the situation and that we need exams and glasses with a date of service of March 15 or earlier. This is definitely stress I could have done without, but I’m grateful that at least something could be worked out so the money won’t go to waste. Next year, I’m definitely not waiting til the very last minute!
Note: A friend mentioned that when her husband was laid off from his job, they lost everything in their FSA that they hadn’t used yet. So job security is something to keep in mind when creating this type of account!