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Many Flex plans will expire in December

Many do not realize that prescription eyewear (including prescription sunglasses and prescription reading glasses) are considered eligible purchases under all flexible spending accounts.

 

 

Flexible Spending Accounts (also known as cafeteria plans) are great!  They let us defer income pretax and set it aside in an account for payment of medical or healthcare related expenses.  Unfortunately there is a small catch.  Since it is a tax deferred account, the IRS has strict limitations of the time that we have to use these funds.

These funds are usable in a 365 day period. To make things a little more complicated, plan administrators may choose different periods as the effective plan year.  Many local plan periods are January 1st to December 31st.  Anything left in the account and not claimed by the plan expiration date is forfeited to the plan administrator and can even then be considered as taxable income on the employee’s payroll taxes.

Use your balance by December 31, 2016 to insure that your expenses are covered this plan year.

Check with your plan administrator for exact dates and rules for your individual plan.