The end of the year means plenty of deadlines, and here’s one that maybe you forgot about: spending down all the tax-free money socked away in a healthcare flexible spending account, or FSA.
When that happens, a lot of us go shopping, says Kate Goughary, who manages Modern Eye in West Philadelphia.
“Our buzz months are usually in June and December,” she says. June because its the end of many firms’ fiscal years, and December because of FSAs.
“I always just say, ‘Don’t panic,’” she says. “We’re here to help, and I have something in this store for every budget and every face.”
People get so worked up because, historically, flexible spending accounts have been use-it-or-lose-it. That changed last fall, and now you can set aside up to $2,550 and roll over as much as $500 to the next year.
“So there won’t be as much of a rush at the end of the year for employees to spend money on things that they don’t really need,” says Bruce Elliott with the Society for Human Resource Management.
The new rule came out so late in 2013 most employers didn’t shift their policies, but Elliott expects that to change for 2015.
So if you have dollars left to spend, “You can use it for just about any medical, dental or vision expense,” Elliott says, “as long as it’s not cosmetic and as long as it’s therapeutic.”
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