2021 Flexible Spending Account (FSA) Dollars Are An Asset
An FSA, also known as a flexible spending arrangement, is a special account you put money into that you use to pay for certain out-of-pocket health care costs. Therefore, you don’t pay taxes on this money resulting in savings that are equal to the taxes you would have paid on the money you set aside. An FSA is beneficial to account holders because it gives them access to the entire annual amount elected beginning on the very first day of the plan year for medical, dental, & vision costs.
Year-end 2021 is approaching fast. with approximately 2 weeks left. Therefore, you must take advantage of your Flexible Spending Account (FSA) dollars. Your FSA dollars can be used to pay for eligible items out-of-pocket vision expenses, medical, and dental. It is important to note that for Health or dependent care FSA funds that are not spent by the employee within the plan year may include a two-and-a-half-month grace period to spend down remaining FSA funds. That is if you are enrolled in an FSA that has adopted the grace period option. You may want to check with your benefits administrator.
The good news for 2022 is that employees can put an additional $100 into their health care flexible spending accounts (health FSAs) next year. The IRS announced this change on Nov. 10 which allows the annual contribution limit to rise to $2,850, up from $2,750. Open enrollment for the 2022 benefits year is already underway at many organizations, and the increase may have come too late for some employees to take advantage of due to the enrollment date being closed.
There are three types of FSA accounts:
- Health FSA: The most common type of FSA is a Health FSA, also known as a Medical FSA, which covers out-of-pocket expenses with pre-tax dollars.
- Dependent Care FSA: Allows employees to pay for employment-related dependent care services on a pre-tax basis
- Adoption FSA: Employees can set aside pre-tax money to use on expenses incurred while adopting a child.
Items that are covered under Health FSA (Source: FSA Store):
- Eye Exams
The cost to cover a visit to the optometrist’s office for an eye exam is FSA eligible! A standard eye exam will consist of vision tests to check close and distant vision, Tonometry to test for glaucoma, and a thorough exam of the inner eye after the pupils have been dilated. Most eye exams will only take an hour or more to complete, which provides enough time for the exam and to be fitted for a prescription vision correction method if necessary.
- Eye Drops (OTC)
March is the arrival of spring allergy season, and your vision could suffer greatly during peak pollen days when contending with itchy, watery eyes. Anti-allergy eye drops are FSA eligible and can relieve the discomfort that often accompanies the early spring for allergy sufferers.
- Eye Surgery
Eye surgery that is necessary to correct vision loss is FSA eligible. Therefore, if you or a loved one needs corrective surgery as the result of a vision problem or a recent injury, these procedures would be covered. Also, vision correction surgeries such as LASIK are FSA eligible, so common vision issues such as presbyopia (poor far-sighted vision) and myopia (poor nearsighted vision) can be treated in a single doctor’s office visit.
- Eyeglasses / Frames
If you wear glasses, an FSA can help you save hundreds each year on the frames, lenses, and accessories you need to see clearly. Both reading and prescription eyeglasses are FSA eligible, as well as eyeglass repair kits, cleaning cloths, and sprays to help you prolong the life span and efficacy of your vision correction methods.
- Contact Lenses
Contact lens wearers must support their vision correction methods with a rigorous cleaning and maintenance regimen. Contact lenses, lens solutions, and carrying cases are daily mainstays for contact lens wearers, but luckily all of these products are FSA eligible as well. This can help contact wearers save hundreds each year on the products they use every day.
- Eye Care And Care Accessories
Eyeglass accessories are items used for prescription eyeglasses or prescription sunglasses. And therefore must be used for the adaptation, maintenance, or repair of prescription eyeglasses or sunglasses. Cosmetic, non-prescription eyeglasses or sunglasses are not eligible for reimbursement. However, eyeglass accessories that help maintain eyeglasses include
- Lens cloths
- Lens cleaning solutions
- Eyeglass protection solutions.
- Repair kits
- Eyeglass Cords
- Screwdriver kits
- Replacement nose pads
- Temple pads
Eye Care Items Not Covered Under FSA
Sunglasses are only eligible for reimbursement with an FSA if they contain prescription lenses. Nonprescription sunglasses do not assist with vision correction, therefore they are not eligible for FSA reimbursement.
- Blue Light Blocking Glasses
Blue light blocking glasses are usually not FSA-eligible. However, your provider may reimburse you for a portion, or all of the cost if you need them for treatment of a medical condition.
FSA Rules 2021:
The rules regarding an FSA account may vary depending on your employer. You must contact your benefits administrator to confirm what is covered:
- 2021 carry over to 2022. Employees may be able to carry over all of their unused health funds from 2021 to 2022 (Per IRS)
- During the pandemic, employers were allowed to offer more flexibility, an employer could allow a 2 ½-month grace period to incur health expenses, usually runs from January 1 to March 15 of the following year
- Pairs of prescription eyeglasses and sunglasses that are allowed per year
Contact us to schedule an exam and discuss what items your FSA dollars will cover.
Merry Christmas, Happy Holidays, And Happy New Year!