Marlo's Corner

September 2021 | Issue 1
Employees can also use money from FSAs to cover pregnancy tests and prenatal vitamins, hearing aids, canes and wheelchairs. They can also use funds to cover personal trainer fees, as along as a letter of medical necessity from their physician accompanies the claim.

The IRS determines which expenses qualify for FSAs and maintains a list on its website. MHC can provide the most current list as well. FSA-holders can either search for individual expenses or scroll through the list to see what opportunities they might be missing. It’s a good idea for employers to provide those lists for employees.
For a more in depth look on eligible expenses, vist our partner Further's website on eligible expenses
The FSA and What to Consider
after Eligible Expenses
Plan Year End Options:

In addition to reminding employees what types of expenses are eligible for coverage by FSA funds, employers should review if their plan has a grace period, runout or rollover. If so, employers should communicate the details with employees, as this can help them take full advantage of the time they have to incur expenses and submit receipts for reimbursement.

A grace period is the amount of time an FSA-holder has after the end of the plan year to spend unused funds or incur expenses. A typical grace period is up to 2.5 months after the plan year ends. A runout is the amount of time an FSA-holder has after the end of the plan year to submit claims for reimbursement. In this case, expenses must be incurred before the end of the plan year. An FSA rollover allows up to $550 to be carried over from one calendar year to the next. MHC recommends the runout and rollover together.
Employees also might not be aware that they can use FSA funds on a medical dependent (up to age 26), whether that dependent is covered by the FSA-holder’s health plan or not. For instance, if an employee has a 24-year-old daughter not covered by the employer health plan who needs a co-pay for a doctor appointment covered, the employee can use their FSA.
FSA Versus HSA:
Lastly, it’s also important to make it clear to employees the distinction between an FSA and a health savings account. While many of the same expenses are eligible for coverage by either an FSA or HSA, make sure to remind employees about a few key distinctions. An HSA is not “use it or lose it.” All funds roll into the new year and do not need to be used up before the end of the plan year. And for an employee to use his or her HSA to cover a dependent’s medical expenses, the dependent must be a tax dependent.