Each year, many Texans give money they saved for health expenses back to their employer. Read on for steps you can take now to prevent it.
WORKERS FORFEIT FSA CONTRIBUTIONS
Each payday, millions of workers contribute tax-free money into flexible health spending accounts or FSAs.
The Employee Benefit Research Institute found almost half of workers later forfeit a chunk of that money.
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"Somewhere in the neighborhood of $370 [each],” Jake Spiegel with the Employee Benefit Research Institute told our colleagues at NBC Bay Area Responds.
“In general, that money is no longer yours and it typically goes back to your employer,” Spiegel explained.
STEPS WORKERS CAN TAKE NOW
FSA rules vary by company. Some employers say employees must "use it or lose it" by Dec. 31. Others give more options.
“Some people have an FSA where there’s a grace period, where you have until March or so to spend down your balance. Some FSA’s have a rollover feature, where you can roll over $500 or $600,” said Spiegel.
Now is the time to check your FSA for your account deadline. You can also ask your company’s Human Resources department what happens Dec. 31.
If you have to spend the balance quickly, here’s a warning about bulk buying one item, like a pallet of sunscreen, to drain your balance.
“Technically, what’s an allowable expense is what you could reasonably consume in a short amount of time,” Spiegel said. “So, if you were to buy an entire pallet of sunscreen, that might raise a flag or two at the IRS.”
Many everyday items, including bandages, pain relievers and home COVID-19 test kits are FSA-eligible. In stores, look on the shelf tag for a label indicating the item is FSA-eligible. Online, many stores have a filter that shows only FSA-eligible items to help you spend every penny.
NBC 5 Responds is committed to researching your concerns and recovering your money. Our goal is to get you answers and, if possible, solutions and a resolution. Call us at 844-5RESPND (844-573-7763) or fill out our customer complaint form.
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