Tax day isn't the only deadline you have to remember... which by the way is April 18 this year. Many workers have until March 15 to use up their health-care flexible spending account.
These FSA's allow you to use pretax dollars to pay for medical and dental expenses not covered by insurance. There are some new rules that affect how much you can contribute to Flexible Spending Accounts, and how you can spend the money. They include:
- As of January first, it's now tougher to spend money in your flex account by stocking up on things like aspirin and cough syrup.You can no longer use FSA money for over-the-counter drugs without a prescription.
- How much you can spend isn't changing this year... right now contributions are federally capped at $5000. But the max will shrink to $2500 in 2013. So if you're planning an expensive elective medical procedure that's not covered by insurance, consider doing it this year or next.
At most companies, any money left over in your account is forfeited. That's probably why only about 20% of eligible employees sign up for flex accounts.
Click here to read more about the news rules for Flexible spending accounts.