Millions of health care dollars at stake as FSA deadline looms
Health insurance consumers who deposited money into flexible spending accounts (FSAs) in 2010 could wind up wasting up to $400 million in 2011 if they don’t use the funds before an impending deadline, according to a projection from FSAStore.com.
Millions of U.S. workers face a March 15 “use it or lose it” deadline for FSA money they accrued in 2010, FSAStore.com says. Many employers offer that grace period each year so their employees aren’t forced to spend the money within a one-year window that typically closes Dec. 31.
|Millions of Americans could be throwing away money if they don’t meet a March 15, 2011, deadline for their spending funds in their flexible spending accounts (FSAs).|
On average, an FSA participant forfeits $86 in unused funds each year, according to WageWorks Inc., a manager of FSA benefits programs.
Generally, about 80 percent of employers’ health plans allow a grace period. The IRS-approved grace period took effect in 2005.
More than 30 million American consumers — including account holders and family members — are covered by FSAs, which pay for tens of thousands of health care products and services with tax-free dollars. More than 15 million FSAs are active in the United States.
“Millions of dollars are wasted each year simply because consumers do not deplete the funds in their FSAs,” says Jeremy Miller, FSAStore.com’s founder and president.
FSAStore.com based its projection on the average amount of unused money in an FSA account — roughly 2 percent to 4 percent of the total. In 2010, the average FSA contained $1,500. FSAStore.com used the lower 2 percent figure to come up with its projection.
Jody Dietel, chief compliance officer at WageWorks, offers these tips for FSA account holders who are staring at the March 15 spending deadline:
1. Review your health care expenses to be sure you’ve submitted all of your receipts. Often, this simple exercise of getting your paperwork in order depletes the money in your FSA.
2. Make sure you’re up to date on preventive care, tests, dental checkups, vision checkups and immunizations. In some cases, these services already may be fully covered by insurance, “but this is a good place to start,” Dietel says.
3. Take an inventory of health care supplies. For instance, do you need to stock up on contact lenses or contact lens supplies? Keep in mind that as of January 2011, nearly all over-the-counter medication purchases require a prescription before they can be covered by FSA funds. Previously, the federal government allowed all FSA over-the-counter medication purchases without a prescription.