Maximize Your Flexible Spending Account Before Year-End Deadline

As the end of the year approaches, individuals with a Flexible Spending Account (FSA) should take decisive action to utilize their remaining balance before it expires. Funds in an FSA must typically be spent by December 31, 2025, or they risk forfeiting the money. This year, many have found their budgets strained due to rising costs, making it even more crucial to make the most of these pre-tax dollars.

An FSA allows employees to set aside a portion of their paychecks, up to $3,300 for the 2025 plan year, to cover out-of-pocket medical expenses. This includes copayments, prescriptions, and various other health-related costs. While commonly associated with routine medical expenses, there is a wide array of eligible products and services that can enhance health and wellness.

Understanding FSA Spending and Deadlines

FSAs are employer-sponsored benefits, providing employees the flexibility to choose how much they wish to contribute. Unlike Health Savings Accounts (HSAs), FSAs generally do not permit funds to roll over into the next year, unless specifically stated by the employer. Some employers may offer a grace period of one to two months or allow a small rollover of up to $660. To ensure compliance, individuals should review their specific plan details.

It is essential to submit claims for reimbursement with proof of purchase if required, although many plans now offer debit cards that can be used directly for eligible purchases. Keeping receipts is advisable in case documentation is needed later.

Eligible Products and Potential Purchases

The IRS defines qualified medical expenses as costs related to diagnosing, curing, treating, or preventing disease. This broad definition means a variety of products can be purchased with FSA funds. Common items include:

– Broad-spectrum sunscreens (SPF 15+)
– Menstrual care products
– At-home diagnostic tests (COVID-19, flu)
– First-aid supplies and over-the-counter medications
– Medical-grade skincare products

For those looking to make larger purchases, a Letter of Medical Necessity (LMN) from a healthcare provider may allow for reimbursement on items not explicitly listed as eligible. These can include certain fitness devices, specialized mattresses, and more.

Many retailers, including Amazon, Walmart, and CVS, have dedicated sections for FSA-eligible items, making it easier for consumers to find what they need.

Notably, health and wellness technology is increasingly eligible for FSA spending. Items such as the Oura Ring 4, a discreet health tracker that monitors various metrics, can qualify under medical necessity. Similarly, innovative gadgets like Ray-Ban Meta Wayfarers, which blend vision correction with smart technology, may also be eligible with the proper documentation.

For those interested in physical fitness, e-bikes, specifically Class 1 models, are becoming recognized as potential FSA expenditures. A provider’s approval is needed, but it presents an exciting option for those looking to include exercise in their routine.

Luxury items that promote health, such as specialized mattresses from Purple, which cater to specific medical conditions, can also be eligible through an LMN. The reimbursement process requires proper documentation, but consumers can benefit significantly from these purchases.

Innovative pain relief devices, including the Chirp Halo and Theragun PRO Plus, offer additional avenues for utilizing FSA funds. These items not only enhance recovery but also provide therapeutic benefits.

As the deadline looms, individuals are encouraged to check their FSA balances, confirm their plan’s expiration date, and prioritize necessary health care appointments. Stocking up on basic supplies, such as over-the-counter medications and first-aid kits, can also be an effective strategy to maximize FSA funds.

In conclusion, with careful planning and an understanding of eligible expenses, individuals can significantly benefit from their FSA before the end of the year. Taking advantage of this opportunity not only enhances personal health but also allows for a more efficient use of financial resources.