What You Need To Know About 2023 And 2024 FSA Dollars

It’s hard to believe that 2023 is almost over. With less than 30 days left, it’s important to use your FSA dollars before they expire. You can utilize the funds for qualified eye care products, such as prescription eyeglasses, non-prescription reading glasses, prescription sunglasses, eyeglass repair kits, contact lens solutions, and more, for yourself, your spouse, and your dependents. The healthcare FSA contribution limit for 2023 was $3,050, while for 2024, it is $3,200 as set by the IRS. You can carry over up to $610 from 2023, while in 2024, the carryover amount is $640 for the year 2025. Remember, FSA-eligible eye care products include prescription eyeglasses, non-prescription reading glasses, prescription sunglasses, eyeglass repair kits, contact lens solutions, and more.

A Flexible Spending Account (FSA) is a savings account offered by employers that lets you contribute money before taxes towards eligible out-of-pocket healthcare and medical expenses not covered by your insurance. There are three types of FSAs: Healthcare FSA, Limited Purpose FSA, and Dependent Care FSA, each used for different expenses. By using an FSA, you can save up to 30% on out-of-pocket medical and dependent care costs.

Flexible Spending Accounts (FSA) For 2023 And 2024

A Flexible Spending Account (FSA) is a type of savings account offered by employers that allows you to contribute pre-tax money towards paying for eligible out-of-pocket health and medical expenses that are not covered by your insurance plans. There are three types of FSAs: Healthcare FSA, Limited Purpose FSA, and Dependent Care FSA, each used for different expenses. By using an FSA, you can save up to 30% on out-of-pocket medical and dependent care costs.

It’s common for companies to offer open enrollment for health care and medical plans between October and November each year. If you happen to miss this period, you may still be able to enroll in an FSA plan if you have experienced a “qualifying life event”. Below, you can find a list of qualifying life events for Healthcare, Limited Purpose FSAs, and Dependent Care.

It’s common for companies to offer open enrollment for health care and medical plans between October and November each year. If you happen to miss this period, you may still be able to enroll in an FSA plan if you have experienced a “qualifying life event”. Below, you can find a list of qualifying life events for Healthcare, Limited Purpose FSAs, and Dependent Care.

Healthcare and Limited Purpose FSAs include:

• Change in marital status
• Birth or death of a child
• Change in Employment
• Some other event that causes you or a dependent to qualify or disqualify for coverage under the FSA

Dependent Care FSAs:

• Change in marital status
• Change in the number of dependents
• The cost of care has changed
• Change in employment status (you or your spouse)
• Something happened to cause one of your dependents to either become eligible (e.g. an older child or parent who becomes disabled) or cease to be eligible (e.g. a child turns 14)

IRS Changes For 2024 FSA Accounts

In 2024 the amount for dependent care FSAs is $5,000.

It is important to note that there is a “Use It Or Lose It” rule. Per the Internal Revenue Service (IRS),  you must use all the money in your health FSA by the end of the Plan Year, or you will lose the unused balance, However, you use it within the Grace Period which is January 1, 2024, thru March 15, 2024. 

Year-end 2023 is approaching and 2024 is just around the corner. FSA participants in 2023 could contribute up to an annual maximum of $3,050 for an HCFSA or LEX HCFSA. This account is used to reimburse participants for dependent care expenses, such as child daycare, elder care, etc. For 2024, thе FSA contribution limits arе as follows: Hеalth Carе FSA: $3,200. Dеpеndеnt Carе FSA: $5,000. An FSA is a savings account that you pay into throughout the year via payroll deductions. It is a medical spending account offered by your employer.

It is important to note that the main downside to an FSA is the use-it-or-lose-it rule. Any leftover balance generally reverts to the employer. That is If the employee fails to incur enough qualified expenses to drain his or her FSA each year, It is now the time to start planning to leverage your 2023 Flexible Spending Account (FSA) and Health Savings Account (HSA) dollars. The carryover amount for health care and limited-purpose FSAs is increasing. For the year 2023, you can carry over up to $610 in unused funds for plan year 2024.

FSA and HSA accounts both allow for contributions with pre-tax dollars. However, an FSA is not the same as an HSA for tax purposes. HSA contribution limits are different from the FSA limits and they allow for catch-up contributions for those 55 and older, FSAs do not.  Both HSAs and FSAs allow participants to save for qualified medical expenses. HSAs usually allow for higher contribution limits and allow you to carry funds forward. However, you’re only eligible if you enroll in an HSA-eligible health plan.

Eligible Eye Care Items for 2023 And 2024

• Eye Glasses
• Eye Drops (OTC)
• Eye Equipment (prescription glasses and sunglasses and prescription contact lenses. Items associated with the maintenance and care are also considered eligible reimbursable expenses under consumer-directed healthcare accounts.
• Eye Exam
• Eye Mask for Pain Relief
• Eye Pressure Monitor
• Eye Surgery
• Eye Treatment Medication (Source FSA: Eye treatment medications are eligible for reimbursement with a prescription with a flexible spending account (FSA), health savings account (HSA), a health reimbursement arrangement (HRA), or a limited-purpose flexible spending account (LPFSA). Eye treatment medication reimbursement is not eligible with a dependent care flexible spending account (DCFSA). If this is an over-the-counter (OTC) eye treatment medication, it would be fully eligible with an FSA, HSA, HRA, or LPFSA.
• Eye Glass Accessories (Eye Glass Screw Driver, Pre-Moistened Lens Wipes, Keychain Reading Glasses, Eye & Ear Glass Droppers, Reading Glasses On Your Phone, Lens Cleaning Spray, Lens Wipes, Anti-Reflective Leans Cleansing Spray, Repair Kit, Nose Pads, Sunglass Reader With Magnetic Detachable Polarized Lens, Sunglass Reader With Smoke Tint,

2023 FSA Eligible Items.

The year 2023 FSA dollars are for eligible expenses and care provided from the effective date of enrollment through March 15, 2024.  If you have a health plan through your job, you can use an FSA to pay for healthcare costs such as (Source: Metlife, you must check with your employer):

• Health insurance copayments, office visits, co-insurance payments, and deductibles
• Dental work and orthodontia
• Prescriptions
• Therapy and counseling services
• Chiropractic care and acupuncture
• Hospital fees, surgery, and diagnostic services
• Allergy testing
• Home healthcare: Thermometers, pain relief devices, blood pressure monitors, medical alert devices, blood sugar test kits, and more
• Over-the-counter (OTC) medications: Cough, cold, flu, allergy, asthma, pain relief, and more
• Baby and child supplies: Breast pumps, bed mats, bedwetting underwear, baby monitors, and more
• Skincare: Sunscreen, acne products, medicated lip balms, and more
• Oral care: Pain relief, water flossers, denture cleanser tablets, and more
• Foot care: Orthotics, foot creams, callus and corn removers, blister treatment, and more
• Digestive health: Heartburn relief, antacid tablets, laxatives, acid reflux pillows, and more
• Vitamins: Prenatal, nutritional supplements, multivitamins, and more
• First aid supplies: Bandages, pain relief creams, antibiotic ointments, first aid kits, and more
• Sexual health medications and products: OTC and prescription birth control, condoms, ED medications, fertility tests, and more
• Menstrual products: Pads, tampons, menstrual underwear, menstrual pain relief, and more
• Incontinence supplies: Pads, underwear, bed underpads, and more
• Smoking cessation: Programs, products, and more

To Know Facts About FSAs, HSAs, And HRAs (Source: Aetna)

• FSAs and HSAs both offer tax benefits and have annual contribution limits.
• You must have an HDHP to qualify for an HSA.
• Funds in an HSA roll over from year to year. There is no “use it or lose it” rule.
• Many HSAs offer investment options.
• FSAs are “use it or lose it.” That means you’ll lose any funds you don’t spend by the end of your plan year unless the plan has a grace period or carryover feature.
• You can use your FSA to cover eligible healthcare costs at the start of the year. The entire amount is available on day one.
• HSA holders cannot spend more than the funds deposited in their HSA. However, they can save receipts for qualified medical expenses and file for reimbursement later after their balance has grown.
• You can’t contribute to an HSA and a traditional FSA in the same year. But HSA holders can also use an LPFSA for dental and vision expenses, and a Dependent Care FSA for childcare costs.
• You can contribute funds to an HSA and FSA. Only your employer can contribute to your HRA.
• Anyone can contribute to your HSA: you, your employer, or another person.
• With HRAs, employers may limit which health expenses are eligible and the amount you’re able to roll over from year to year.

The 2023 FSA period is January 1, 2023, through December 31, 2023. You are allowed to carry over into 2023 and must use the remaining funds by March 15, 2024. It is important to note that the 2023 FSA funds can only be used to reimburse eligible expenses for care provided from the effective date of your enrollment through March 15, 2024.

Take advantage of the FSA benefits provided by your FSA  account. Contact us if you have questions about your FSA account and eligible items or eye-related items. We are here for you.