Helping employee avoid wasted FSA funds

As the year-end approaches, employees may have unused funds in their flexible spending accounts (FSAs). These tax-advantaged accounts help employees pay for eligible health care expenses with pretax dollars, but unused funds are at risk of being forfeited.

Employees may associate FSA funds with only doctor visits and prescriptions, but many everyday health care products and services may also qualify.

Common FSA-eligible expenses include:

• First-aid supplies, bandages and thermometers
• Pain relievers and cold, flu and allergy medications
• Sunscreen labeled broad-spectrum with SPF 15 or higher
• Menstrual care products, including pads, tampons and menstrual cups
• Pregnancy tests and eligible contraceptives
• Contact lens solutions and prescription eyeglasses
• Eligible over-the-counter medical testing products

Less commonly recognized eligible expenses may include:

• Neti pots and certain nasal sprays
• Wart and corn removal treatments
• Smoking cessation products, such as nicotine gum and patches
• Fertility and ovulation tests
• Adult incontinence supplies
• Prescription sunglasses
• Acupuncture and physical therapy
• Eligible medical transportation and parking expenses

Some expenses require a prescription, a letter of medical necessity or other documentation. Products such as air purifiers, humidifiers and nutritional supplements may qualify only under specific medical circumstances. Employees should check their FSA administrator's eligibility list before making purchases.

Strategic plan design

While many health care FSAs follow a calendar-year schedule, employers can opt to allow a grace period or carryover amount 

Implementing the grace period or carryover amount provides employees with an extra opportunity to ensure funds are used. Consult with your employee benefits team for assistance determining which relief option could benefit your employees.