Every year, millions of people abandon tax-free dollars in a Health FSA when funds go unused at the end of the year. Often, these are resources a household really can’t afford to lose, but what can you do? Well, you can stock up on Health FSA-eligible items like contact lenses, sunscreen, nasal spray, lip balm, eyedrops, first aid supplies, and so much more.
A Health Flexible Spending Arrangement (Health FSA) is a Section 125 Cafeteria plan group health benefit that allows employees and employers to contribute funds that the employee (and dependents) can use to pay eligible medical expenses with tax-free dollars.
Every year, millions of people abandon tax-free dollars in a Health FSA because the funds go unused. Often, these are resources a household really can’t afford to lose, but what can you do?
Well, you can stock up on Health FSA-eligible items like contact lenses, sunscreen, nasal spray, lip balm, eyedrops, first aid supplies, and so much more.
In fact, if people knew just how flexible a Health FSA is when it comes to what it can buy, very few of us would have a surrendered balance. That’s because good health isn’t only about prescriptions, co-pays, and deductibles, but wellness in general. And that means using those funds to make more general health purchases all through the year.
As you can see from the lists, many of us use Health FSA-eligible items every day. So, you probably know where to buy them, but does that matter to your FSA plan?
Not at all. Shop for them at the drug store or grocery store; at major retailers like Target or Wal-Mart, or a locally-owned market or pharmacy. Just be sure to get a receipt that clearly shows what you purchase with the price you paid; then, keep the receipt in your records for the tax year.
And, of course, you can buy Health FSA-eligible items online.
Health FSAs have become so popular that major pharmacies like Walgreens and CVS have dedicated online FSA shops. You’ll also find the FSA Store which, as its name hints, deals solely with Health FSA-eligible items. Most recently, Amazon has entered the field for Health FSA-eligible items with its own specialty shop. All of these online stores make it easy to find what you need and keep a record of FSA purchases.
There are two ways to pay for Health FSA-eligible items:
Most online vendors and many local brick-and-mortar stores accept benefit debit cards for Health FSA items. If you don’t already have one, ask your Health FSA administrator if your benefit plan offers this convenience.
When a store does not accept benefit debit cards, or if one is not available through your Health FSA plan, you will have to buy the item(s) with your own funds and then be reimbursed by your employer.
Submit a claim request using the form your employer provides for reimbursement. The form may be on paper or it could be through an online benefits portal.
Simply fill out the form and attach your (paper or scanned) receipt. Your repayment will arrive quickly, usually in fewer than 30 days. Be sure to keep a copy of all claim forms and receipts you submit.
Employers can enjoy online administration services, including a debit card for employees’ Health FSA purchases, for $10 or less per employee, per month, with CoreAdmin services.
