Do you have a medical flexible spending account at work? If so and you ended 2007 with money in the account, you might have a second chance to spend it.
But you have to hurry. The ultimate deadline for plans that ended their benefit year last
First a quick refresher. If you have one of these plans, commonly called FSAs, you get to put money into the accounts before taxes are taken out. That lessens your tax bite.
Then you get to use that pre-tax money to pay for medical costs that would have come out of your pocket anyway, like insurance co-pays, deductibles and uninsured services such as chiropractic treatments or eye exams.
But those pluses are offset by a big minus. If you don't use all the money in your FSA by the end of your benefit year, you lose it. For workers whose companies operate on a calendar basis, that was
A few years ago, the IRS gave employers the option of granting its FSA holders 2½ more months to spend up their medical accounts. That's coming up on Saturday, March 15.
A quick caveat here. The extension is optional. The IRS says companies can offer it to their workers, but they don't have to. So if you're unsure about whether you have a bit more time to spend up 2007 FSA money, talk to your benefits, payroll or HR manager today.
Timing is everything: Now some folks say that because it's a weekend, the option extends until the next business day, or Monday,
But this deadline doesn't have anything to do with that. Although FSAs offer tax advantages, they are a private sector matter and involve the spending of your account money or, in many cases, your money which you'll be reimbursed from your FSA.
And that spending can definitely be done on a Saturday.
The people I spoke to at the IRS, American Payroll Association and Ceridian, a major benefits administration company, all said the
FSA shopping list: With the FSA deadline looming for some of you, let's look at ways to spend all your 2007 funds so your don't forfeit them.
Granted, it's probably too late to get into a doctor for any elective, but medical, treatments. The word "elective" in this case is intentional. That's often associated with cosmetic treatments, either surgery or dental work simply to brighten your smile. Those treatments aren't reimbursable under FSA rules.
But things like a chiropractor or acupuncturist treatments that typically are not covered by workplace insurance can be paid for with FSA funds. So can vision exams, so you might want to drop by a LensCrafters or such today or Saturday.
And, of course, you all know by now that over-the-counter medicines are allowed under FSA rules. So stock up on aspirin or ibuprofen, cough medicine and Band-Aids.
My local Walgreens has a sign in its window reminding customers of the FSA deadline. It also has a list of potential FSA-eligible OTC items on its Web site. So does Drugstore.com. And the insurance company Cigna has a sample FSA product list.
You also can get more ideas in these FSA stories I wrote for Bankrate and TheStreet.com.
Happy medical shopping!