Use It or Lose It: 25 Ways to Spend Your Flex Account

by Stacy Francis, CFP®, CDFA

If you've been healthy this year, congratulations! But if you've spent less on medical expenses than you expected when you set up your flexible spending account, you may be scrambling to find ways to use the money before it disappears. Studies by benefits specialists regularly show that employees typically forfeit more than $100 each year in medical flexible spending accounts.

Flexible spending accounts offer employees a great way to reduce their taxable income while at the same time paying for medical or childcare expenses they know they'll encounter during the year. Many companies let employees set aside $2,000 to $3,000 annually in pre-tax money to spend tax-free on medical expenses.

It's a great deal, but the big catch is that you lose what you don't use by the end of the plan year. But in late October, the Treasury Department announced a new $500 rollover option that companies can adopt voluntarily.

Savvy Ladies’ Tip: You can use the flexible spending account money for almost any health-related expense that isn't covered by insurance, including:

Deductibles and co-payments Dental work and orthodontia Eyeglasses, prescription sunglasses, contact lenses and laser eye surgery Psychotherapy, psychiatry, psychology Drug and alcohol treatment Smoking cessation programs and prescriptions Medically necessary cosmetic surgery Massage therapy to treat an injury, physical therapy and speech therapy Out-of-pocket expenses for fertility treatments Chiropractic care Doctor-recommended weight-loss programs Hearing aids and batteries Medical equipment, such as wheelchairs, crutches or oxygen equipment Assistance for the disabled, including guides, Braille books, seeing-eye or hearing-trained animals, note takers, etc. Birth control pills, devices and procedures Acupuncture or related procedures to treat a medical condition Medically necessary prescriptions Vaccinations

Now you can also use flex funds for medications that don't require a prescription, such as allergy and cold medications, antacids and pain relievers.

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.