More than 33 Americans utilize a Flexible Spending Account (FSA) through their employer to pay for out-of-pocket medical expenses. While funds are used for qualified expenses such as copays at the doctor office, prescription drugs, and over-the-counter medical supplies, many may be surprised that FSA dollars can be used for much more than that.
The BASE® Flexible Spending Account (FSA) provides employees with more options to pay for out-of-pocket medical expenses not covered by insurance. Employees elect to have a set dollar amount up to the government established limit, $2,750 for 2020, deducted pre-tax from their paychecks.
There are many common, everyday medical expenses that FSA funds can be spent on, some eligible expenses may come as a surprise! A few are listed below:
- Staple Medication. On average, Americans spend $338 per year on over-the-counter (OTC) products per year. With a prescription, OTC medications are FSA-eligible. For example, pain relievers, allergy medicine, heartburn relief, antacids, and other medicine cabinet staples.
- Allergy Testing. More than 50 million Americans suffer from allergies each year. With help from a doctor, an allergy test can quickly pinpoint the cause. Allergy sufferers can save by paying for this test with money from their FSA.
- Medication Accessories. About 55% of Americans regularly take medication with an average of 4 prescription drugs per day. Pill boxes, clocks, organizers, sorters, and cutters can help manage medications. Using FSA dollars can help keep medications straight and taken on time.
- Eye Care. More than 6 out of 10 Americans wear glasses or contact lenses. For those who do not have perfect vision, with a current prescription, FSA dollars can be used to purchase prescription glasses, contacts, and sunglasses.
- Flu Shot. The flu vaccination reduces the risk of getting the flu by 40-60%. The flu shot is FSA eligible and by getting it, the risk of getting the flu, and enduring flu-related hospitalizations, can be lowered.
- Travel Preparation. In 2018, 93 million Americans traveled outside of the country. Even though FSA dollars cannot pay for the trip, travelers can stock up on travel essentials, such as, travel pillows, sunscreen, motion sickness bands, etc. beforehand.
- Baby Essentials. According to a USDA report, the average family will spend roughly $12,000 on child-related expenses in their baby’s first year of life. Parents-to-be can save big on a variety of must-haves, as well as on pricey safety devices, such as a device that a baby wears that will track heart rate, oxygen levels, and how well they slept.
For a full list of eligible medical expenses, check out Publication 502. If still unsure, check with the terms of the account. Another resource to check out – Health Shopper – find all eligible needs in one place!
Both the employer and employees benefit from utilizing the Flexible Spending Account. By sponsoring an FSA, employers provide another means for their employees to pay for medical expenses through an employee-funded benefit plan further enhancing their benefits package. Employers save on FICA and FUTA taxes and save even more as more employees choose to participate. Employees will see an increase in their take-home pay due to the funds being transferred on a pre-tax basis, and save federal, state, Social Security, and Medicare taxes. Employees can enjoy easy access to pay for qualifying medical expenses with a swipe of a debit card, and the flexibility the account offers.
For more information on the BASE® Flexible Spending Account (FSA), call 888.386.9680.