Spending down your FSA starts with the right payment card
If you have money left on your FSA debit card, now is a good time to put it in your wallet alongside your regular bank debit card. The end of the year is the annual deadline to spend your FSA funds.
You probably have an FSA card if you have a flexible spending account, an employee benefit that lets you deduct money from your paychecks tax-free for out-of-pocket health care costs. The FSA debit card may look like a regular bank card, but it can be used for health expenses only. The eligibility list is generous, however. Your next doctor’s visit copay, prescription refill or box of bandages could all be covered.
People who don’t use up their funds often leave an estimated $50 to $100 behind, according to representatives from FSAStore.com, an online site that specializes in eligible health care products.
There are advantages to using an FSA card to draw down your account, but in some situations, it’s better to use the card from your bank or other form of payment, then file a claim to be reimbursed. Here are some of the best times to use each.
Use your FSA card to pay for health expenses you don’t want taken from your regular bank account. This can make it easier to manage your budget, says Paul Miller, a certified public accountant and owner of Miller and Company, an accounting firm in New York. Looking ahead to next year, you can use the card even if your bill is larger than the amount of your year-to-date FSA payroll deductions. Say you have a surprise emergency room visit in January and need to pay $400 out of pocket for your copay, prescriptions and medical equipment.
The FSA card is there for you, provided you signed up for at least $400 to be de