Don’t Lose It! FSA Funds, That is! Tips for Spending Remaining FSA Funds

As we approach the end of the year, it may be the case that many employees are unaware that they may have unused flexible spending account (FSA) dollars left in their accounts. Beneficially, an FSA allows employees to set aside pre-tax dollars to be spent on eligible health care out-of-pocket expenses that a health care plan does not cover. But this year, the pandemic has made if difficult, if not impossible, for many to use those funds. And, importantly, FSA accounts are “use it or lose it” accounts: any of the funds left over in accounts will be forfeited.

Given the fact that those funds do not rollover into the next year (unless the group allows a rollover—the IRS allows up to $550—or offers a grace period to extend the claims deadline), it’s important for brokers to remind employers to encourage employees to spend what they have set aside.

Tip #1: There are plenty of items that employees can spend their FSA dollars on. And with most people practicing social distancing and trying to stay home, one doesn’t even need to leave home to purchase FSA-compliant products. Amazon FSA and HSA store offers hundreds of products that can be shipped to employees’ homes. (And as an added bonus, shipping and handling fees for eligible expenses can be covered by FSAs – and the Further debit card can be used as a payment method on using Amazon!)

Note: The CARES Act, which passed earlier this year, allows employees to purchase over-the-counter medicines from their FSA without a prescription. With cold and flu season ramping up, now is a good time to stock up.

Below find examples of qualifying items, many of which may be unknown to many:

  • Antibiotic creams, allergy medicines, pain killers, and many other OTC products
  • Flu shots
  • Sunscreen (30 SPF or higher)
  • C-PAP machine and supplies
  • Travel pillow with orthopedic neck support
  • Acupuncture, dental procedures and eye exams/surgery, including laser
  • Arch supports
  • Childbirth/Lamaze classes and feminine hygiene products
  • Reading Glasses
  • Disposable masks (with a Letter of Medical Necessity)

Go contactless by adding the Further debit card to your phone’s digital wallet for contactless checkout. With digital pay,* simply hold your phone above the payment terminal in stores and pharmacies to pay for your purchases.

you can purchase several types of items to spend down your fsa

Tip #2: Employees should keep in mind that FSA dollars can also be spent on a medical dependent (meaning someone who could be put on one’s health plan), up to the age of 26, even if that person is not covered by your health plan. For example, if an employee’s 23-year-old son or daughter is home from college and needs a flu shot or OTC supplies, those are both eligible FSA expenses and can be purchased with an employee’s FSA funds. By spending this money before it is forfeited, employees have the opportunity to save tax money on medical costs. View this complete list of eligible expenses for a searchable directory of IRS approved expenses.

There’s still time in 2020 to ensure that no FSA funds be forfeited. Share this information far and wide!


*Not every group has access to digital pay. Check with group services line at 888-460-4013 if you are unsure whether this feature applies to you.

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