Flexible spending accounts, or FSAs, allow employees of companies that offer the accounts to set aside pretax money from their paychecks for out-of-pocket health care or dependent care expenses.
A little less than one-fourth of FSAs require account holders to spend all the money by the end of the plan year, forfeiting their funds if they miss the deadline, according to the Employee Benefit Research Institute. The rest offer some wiggle room, with 42 percent of FSAs permitting employees to roll over a certain amount of unused funds to the following plan year and 36 percent offering a grace period of 2 1/2 months to use up the money.
For FSA plan years that ended Dec. 31, 2022, and have a grace period, you have until March 15, 2023, to spend the funds. And depending on your plan, you may have until March 31 to file claims for reimbursement of eligible purchases that you made before your FSA’s spending deadline.
If your health care FSA has a grace period and you still have 2022 dollars to spend, review your options among qualifying purchases. Health insurance copayments and deductibles and prescription drugs are common ways to spend FSA money. But many other products qualify too.
Don’t overlook items that have become newly eligible in the past few years. Thanks to a 2020 law, over-the-counter medications such as pain relievers, cough suppressants, allergy medicine, and heartburn medications qualify, as do certain menstrual-care products. As a result of the pandemic, the IRS has also deemed eligible at-home COVID-19 tests and personal protective equipment including face masks, hand sanitizer and sanitizing wipes.
More recently, a 2022 Food and Drug Administration ruling opened the door for consumers to buy hearing aids without a prescription, and as with prescription hearing aids, you can use FSA money to buy them.
You can get a range of medical equipment and devices with FSA funds, from canes, crutches and walkers to blood-pressure monitors, support braces for injured muscles or joints, and CPAP machines and accessories. First-aid kits, bandages and thermometers also qualify, as does sunscreen with an SPF of 15 or higher—and that includes facial moisturizers and lip balms containing SPF.
And don’t forget that vision and dental expenses such as prescription eyeglasses and contacts lenses (as well as lens solution and cases), reading glasses, and orthodontic braces and aligners are eligible.
(Lisa Gerstner is a contributing editor at Kiplinger’s Personal Finance magazine. For more on this and similar money topics, visit Kiplinger.com.)
