Posted Feb.09, 2011 in Flexible Spending Accounts
The deadline is fast approaching for many to get their 2010 medical, dental or vision expenses into their Flexible Spending Account administrator. This grace period varies depending on who you have your account with and what your employer offers to you. Some companies allow you to spend money left over in your FSA during this grace period which is a definite benefit since if you don’t use it – you will lose it.
Something to remember is that whatever money is left over in your FSA is forfeited so you want to take the time when filling out your FSA paperwork to figure out what your possible medical expenses will be for the year. In 2005, the Internal Revenue Service loosened the use-it-or-lose-it limitation (IRS Notice 2005-42). Since then, spending-plan participants are allowed to make claims against their accounts for up to two months and 15 days immediately following the end of each FSA plan year. This grace period means employees on a calendar benefit year now can use their prior-year FSA contributions for expenses incurred as late as March 15 of the following year. The problem with this is that even though the IRS ruled on this, companies are not required to extend their FSA withdrawal periods.
If you have money remaining in your FSA account from 2010 or you have medical receipts from 2010 that you haven’t yet submitted for reimbursement, check with your account administrator or your company’s human resource department to see if 1) there is a grace period offered to you to submit receipts and claims, 2) when the grace period ends, and 3) are you able to use the money left in your account from 2010 on medical expenses during the grace period.