Flex Spending: guess who gets whatever we don't use....

[ejpoeta]

Through my husband's work we have a flex spending account. Last year we lost $700. This year we are set to lose the same. My husband has had to fight with them every time we use it. Even though we have the proper paperwork or receipt or whatever it is we need. I have always thought the government gets it if we don't use it. That is bad enough... But the government doesn't get it. Bob's EMPLOYER gets it. So bob is losing part of his pay back to his employer. It comes out of bob's paycheck. Yes, it is pretax, but couldn't they just deduct the tax and refund the money we don't use?? Is there a logical explanation why whatever we don't use goes to the employer?? Because if there is I'd like to hear it. It is hard to anticipate how much we would need. My mental health provider won't take a card, so I have to pay up front and be reimbursed. I have not done so as yet this year, but I worry that they will give us a problem. For whatever reason.

/rant over.

BTW: next year we are ditching the flex spending and taking that money and putting it in a separate account for use only for medical stuff. Even if we end up paying taxes on the money, we'd still come out ahead after we lose what we don't use. And I could write a check from it for my counselor.

[joeglow3]

1. Works both ways

Just so you know, you can spend more than you have put in this far this year. I knew someone who was going to leave their job and always wanted LASIK. He held off the new employer until The end of January . He had LASIK first thing in January got his reimbursement and quit. The company was out over $3,000.

[ejpoeta]

8. that is not right. i would never do anything like that!!

he should have to pay that back!! but thank you for that perspective. that seems so low!!

[joeglow3]

12. The company ended up ahead

With all the money they got to keep over the years. Just allowed him to minimize his losses.

[Lex]

2. I have a plan with a Health Saving Account (HSA) and with those

you never lose it. It rolls over year to year, and even if you stop that particular health insurance, the money is still yours.

http://www.treasury.gov/resource-center/faqs/taxes/pages/health-savings-accounts.aspx

[ejpoeta]

9. not offered at my husband's work. I like the idea though. I wish that were available.

[seattle15]

22. True, but check on those fees

Work put $65 per month in mine. When I went to use it on an eye exam and glasses ten months later, I didn't have enough to cover it. Chase took $30 per month in fees.

[Lex]

23. I placed my HSA with my Credit Union. No fees

and a better interest rate.

[NYC_SKP]

3. We have a "Section 125" plan, I think unspent funds stay with the plan provider, an insurance co.

What the hell don't they just let us deduct our medical costs instead of making us go through this bullshit paperwork.

Arrgggh.

[Fumesucker]

24. Because of all the people that won't get the paperwork perfect, pure profit for the insurance Co.

[dflprincess]

4. "Use it or lose it" rule changing

Last edited Sun Nov 3, 2013, 11:37 PM - Edit history (1)

It seems a bit vague about whether or not it will apply to this year's accounts though it does say the changes "could be implemented"

[div class = "excerpt"]
http://money.cnn.com/2013/10/31/pf/flexible-spending-accounts/

There's good news for workers worried about forfeiting the money they put into their flexible spending accounts at the end of the year.

On Thursday, the U.S. Treasury Department announced it would be relaxing a rule that requires account holders to "use-or-lose" the funds in their accounts by the end of the year. Employers will now be able to allow participants to carry over up to $500 in unused funds into the next year....

...The change comes in response to individual and employer complaints that it's hard to predict future medical needs and that the "use or lose" rule encourages unnecessary spending on medical services and items at the end of the year.

An estimated 14 million families already participate in health FSAs. The changes may encourage other workers to use the accounts, which financial planners say are a good way to manage out-of-pocket medical costs....

... But first, employers need to offer this option to workers. The Treasury Department said the changes can be implemented as early as the 2013 plan year.

[ejpoeta]

10. thank you for posting this!

I do agree with the using the money... i argue about the unnecessary part. Last year we each bought prescription sunglasses. I guess it wasn't necessary, though it sure helps me drive and be able to see better with the sun blaring. I hope this can happen. I would rather be able to save some. I told my husband to ask them at work about it.

[dflprincess]

20. I'm glad you asked the original question

I had heard a one sentence remark about this on the local progressive radio station on Friday and had meant to check it out but had forgotten about it.

Look at your sunglasses this way, they're one of the few things you can do to help ward off age related macular degeneration and slow the deveopment of cataracts...or that's what my eye doctor tells me. My mom had both conditions so I wear my religiously.

[Last Stand]

17. Thanks for this. It's tough to calculate/anticipate.

We used to buy over the counter stuff to eat some of the balance at the end of the year, but Flex Spending OTC stuff was one of the first casualties of Obamacare. I didn't mind so much that they needed more money for universal healthcare coverage, but it made it hard to use enough but not too much FSA money.

[sharp_stick]

5. I've never left any on the table

saves me a lot of money. But you do need to have a pretty good idea of your yearly spend to make it work well.

[Lars39]

6. Have you appealed their decisions to deny payment?

If you think something shady's going on, contact the IRS...maybe they'll do an audit. I've had a flex acct now for 3 years and only had 1 denial, and that was because something was described wrong.

[ejpoeta]

11. bob fought with them and go it accepted.

last year they froze the card and we had no idea why. I went to use it and they couldn't accept it. I paid out of pocket and bob had to call and find out what was going on. It becomes a PITA!

[Niceguy1]

7. I have never had a denial

But is was way easier before the law was changed...before you could use it for itc stuff, like contact cleaner, cold medicnenso tou could always use up your balance.

[Travis_0004]

13. you can use a fsa account for everyday items

Asprin, sunscreen (spf15+), condoms can all be bought on an fsa account. I wonder if you could buy a bunch of OTC medicine. Keep a years supply and donate what you cant use. It beats loosing it. Then next year maybe put less in the account.

[ejpoeta]

14. bob says we can't buy anything like that without a prescription.

I couldn't even get vitamin D, which was recommended by the doctor last week, unless they give me a prescription. Last year we tried to get reimbursed for a gym membership and they wouldn't do it unless the doctor said it was necessary or something. But the guy I had been seeing left my doctor's office and so they wouldn't give me that info. So we lost $700 and ended up having paid for the membership ourselves... which was $800

[Skittles]

15. what about eye exams, dental work?

[Lars39]

16. Eyeglasses and dental work would be reimbursed.

There should be a list of approved items on the flex website.

[ejpoeta]

18. Yes eyeglasses and dental work. I told bob he should get his bottom plate

He's been needing it for a long time

[joeglow3]

19. Your employer doesn't get to decide

Here is the IRS publication on what is acceptable:

http://www.irs.gov/publications/p502/index.html

[NYC_SKP]

25. There are limitations but a lot of OTC purchases are ok without prescription.

Ask your pharmacist.

Some pharmacies even collect your purchase information and are able to spit out a receipt for your year's eligible purchases!

One year I had leftover funds and bought first aid kits and back and knee braces and ice packs.

[tammywammy]

26. That has changed. OTC is not reimbursable.

Refer to the IRS link above. It changed last year I think, part of ACA. You cannot get reimbursed for OTC medicine without a prescription.

[tammywammy]

21. I've never lost money with my FSA.

I can roughly calculate my out of pocket expenses. Next year's prescriptions, new eye glasses and frames and contacts for the year. I put a little less than my estimated total. Never had a denial or any issues getting reimbursed.