End of Year Tips for Reimbursement Accounts
The end of a calendar year can be a busy season. As you prepare for the new year, check out these tips for managing your reimbursement account.
Healthcare Flexible Spending Account (Healthcare FSA)
Tip: Don't Forget the "Use or Lose" Rule
If you have a Healthcare FSA, you must use your account balance before the end of your plan year or the end of your grace period, whichever is applicable. If you do not use your remaining account balance, you may lose these funds. If you have the carryover, you may carry over up to $500 into your new plan year.
If you don’t know how to use up your unused funds, here are a few ideas:
- Schedule any annual appointments you haven’t had yet and use your unused funds to cover the eligible co-pays or regular prescriptions.
- Purchase eligible products for everyday health needs at your local pharmacy or online at the FSA Store. Review eligible expenses you can purchase, like band-aids, prescription contact lenses, and more. Pay attention to which items require a prescription or letter of medical necessity, and don’t forget to save the itemized receipts for any items you purchase.
- If you purchased an eligible medical expense item or paid for a doctor’s visit out-of-pocket, you may be able to submit the receipt from this transaction and be reimbursed from your Healthcare FSA account.
Health Savings Account (HSA)
Tip: Don't Panic About Unused Funds
Unlike a Healthcare FSA, unused HSA funds in your account roll over each year. This means your unused contributions will continue to accumulate until you need them.
Tip: Update Your Information
With an HSA, you’ll receive your tax documents at the beginning of the new year. Now is the time to make sure your address or any name changes are updated with your HSA provider. This will help prevent any delays in receiving accurate tax documents.
Tip: Evaluate Your Contributions
The new limits for HSAs for 2020 are $3,550 for individuals and $7,100 for family coverages. Now is a great time to evaluate how much you can contribute in the upcoming year. As a reminder, you can change your HSA contribution at any time during the plan year.
Health Reimbursement Account (HRA)
Tip: Talk to Your Employer
Unlike Healthcare FSAs or HSAs, HRAs are 100% employer-funded. While HRAs do not explicitly have a “use or lose” policy, employers may choose whether or not any remaining funds in a participant’s HRA are forfeited at the end of the plan year or if they can roll over into the next year. Be sure to talk to your employer if you have any questions on how they handle your HRA account.
If you’re not sure what type of account you have, be sure to talk to your employer. Preparing for the new year doesn’t have to be overwhelming. Following these tips and taking the time to review your benefits can set you up for a seamless transition into the new year.