Author Topic: Accidental FSA Hell  (Read 7553 times)

VentureStache

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Accidental FSA Hell
« on: February 25, 2016, 03:25:06 PM »
Help! Instead of clicking the HSA button way back in July open enrollment at my company, I apparently chose an FSA.  I just found out when trying to fund my HSA that I cannot and have been contributing to this damn FSA all year! (yeah I should have realized, but it came right at the time of a slight raise so I didn't notice the monthly deductions)

Now I have 4 months to spend $2,500 on medical expenses.  I am a 26 year old with no health conditions other than allergies (thinking about allergy shots, but only have 4 months)!

After a flurry of panicked research, I have discovered the list of what you can buy is short.  They have the rules now where you can't even be reimbursed for buying advil unless you have a prescription for it! (Buy hey I can get unlimited condoms and heating pads apparently... but that's about it.  Even sunscreen has a "3 per month" limit)

I now have an eye doc apt., teeth cleaning, allergy shot consultation, and sports medicine doc apt. in the next two weeks and I am pretty sure they will all be covered by my insurance.

This is already a disaster, how do I mitigate the damage!?!  Does anyone have experience with the FSA hell hole?

(p.s. already had lasik last year... before my stupid mistake)

AZDude

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Re: Accidental FSA Hell
« Reply #1 on: February 25, 2016, 03:44:50 PM »
Is there a way to withdraw the money and just pay a penalty?

I did see this on Healthcare.gov:

Quote
You generally must use the money in an FSAwithin the plan year. But your employer may offer one of 2 options:

It can provide a "grace period" of up to 2 extra months to use the money in your FSA.
It can allow you to carry over up to $500 per year to use in the following year.

So there is that much at least.

I think you could withdraw the money, then pay the taxes on it at tax time, but no idea what the penalty(if any) would be.

TXScout2

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Re: Accidental FSA Hell
« Reply #2 on: February 25, 2016, 04:03:05 PM »
Get invisalign/braces, or get a doctor to prescribe you some weekly massages/rolfing? 

Jack

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Re: Accidental FSA Hell
« Reply #3 on: February 25, 2016, 04:18:17 PM »
Is there any way to claim the entire enrollment was in error (especially since it was) and retroactively cancel the whole thing?

bobechs

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Re: Accidental FSA Hell
« Reply #4 on: February 25, 2016, 04:48:46 PM »
Rectal examination gift cards, ftw.

Cathy

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Re: Accidental FSA Hell
« Reply #5 on: February 25, 2016, 04:52:06 PM »
Is there any way to claim the entire enrollment was in error (especially since it was) and retroactively cancel the whole thing?

Good question. First of all, we need to understand what is being discussed in this thread. Subject to various qualifications, a "cafeteria plan" is basically a benefit program under which an employee can choose whether a certain amount of compensation will be paid (i) in cash or (ii) in benefits. 26 USC 125(d)(1)(B). Without expressing any view on the specific situation of the original poster, I can say that, commonly, employers may offer a cafeteria plan under which an employee can choose to receive either (i) cash or (ii) health benefits under a flexible spending arrangement.

According to regulations promulgated by the Secretary of the Treasury under 26 USC 125(l), one of the conditions for a plan to be a cafeteria plan is that elections under the plan must be irrevocable except as described in 26 CFR 1.125-4, but even then, revocations are allowed only in accordance with the terms of the cafeteria plan (in other words, the employer doesn't necessarily have to offer all of the exceptions contained in that regulation). Retroactive changes are sometimes allowed, but "error" or "mistake" on the part of the employee is never by itself a basis to revoke a valid election under a cafeteria plan. Id.

For academic completion, and still without commenting on the specific situation of the original poster, I should also mention that just because the employer advertises its plan as a cafeteria plan yielding tax benefits, that doesn't necessarily mean that it actually is one. The employer's plan might allow elections to be revoked retroactively for any reason. In that case, the employee would be entitled to exercise that right. However, a side effect of the plan allowing that would be that the plan is not a cafeteria plan and so does not yield tax benefits under the provisions relating to cafeteria plans. The only way to determine whether a purported cafeteria plan is actually a cafeteria plan is to read the documents governing the plan.
« Last Edit: February 25, 2016, 05:15:55 PM by Cathy »

TomTX

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Re: Accidental FSA Hell
« Reply #6 on: February 25, 2016, 05:35:18 PM »
Cathy, you are awesome!

ender

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Re: Accidental FSA Hell
« Reply #7 on: February 25, 2016, 05:55:57 PM »
Talk to your benefits people too.

I was accidentally signed up for the wrong FSA last year - but they had confirmation of which I had chose (it was their mistake).

It might be you actually signed up for the right one, too. Apparently there was a manual process somewhere in mine that broke for me.

Dee18

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Re: Accidental FSA Hell
« Reply #8 on: February 25, 2016, 06:33:03 PM »
Hope you find a fix?  I felt bad because I had $60 left in my account.  Now I'm going to call my H"r people and see if I can still use it so ehow.

VentureStache

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Re: Accidental FSA Hell
« Reply #9 on: February 26, 2016, 12:45:12 PM »
Thanks everyone, unfortunately there is no way to opt out (without a qualifying event, like getting fired) and it was my mistake so I am definitely stuck with the FSA and cannot even stop my contributions for the rest of the year.

I got invisilign 3 years ago but will order a replacement retainer... so there's $150 spent!

This is such a weird situation to be forced to spend MY money on things I don't feel like I want or need.  But I am going to try for my gym membership to be paid for and came up with allergy shots as an idea.


But I will also definitely be looking into the rectal exam gift cards ;)

charis

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Re: Accidental FSA Hell
« Reply #10 on: February 26, 2016, 01:07:29 PM »
So sorry - that is the worst.  Got any dermatology needs?  Some dermatologists have cosmologists in their office too, although I have no idea whether that would be covered.  Prescription laser hair removal, freeze off some moles, start going to physical therapy for whatever you need in sports medicine? 

crispy

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Re: Accidental FSA Hell
« Reply #11 on: February 26, 2016, 01:20:59 PM »
Cosmetic surgery?  I kid, I kid!

Inaya

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Re: Accidental FSA Hell
« Reply #12 on: February 26, 2016, 01:21:57 PM »
How's your eyesight? I know several people who have had to panic-spend their FSAs and chose to get Lasik.

Kwill

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Re: Accidental FSA Hell
« Reply #13 on: February 26, 2016, 01:32:43 PM »
What about first aid kits? Maybe you could get one for your car and a nice big one for home.

Also, just found this: https://fsastore.com/
It's an online store with just FSA-eligible products, including some fancy first aid kits a "goodies" section with random stuff you wouldn't expect to be eligible.
« Last Edit: February 26, 2016, 01:39:22 PM by Kwill »

rubybeth

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Re: Accidental FSA Hell
« Reply #14 on: February 26, 2016, 01:37:41 PM »
If you get your vision checked, you could just get a whole bunch of disposable daily contacts (like 3 years worth) or a few pairs of glasses to use up the balances. Glasses can be $400-$500 if you get fancy coatings and expensive 'designer' frames. :)

nobody123

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Re: Accidental FSA Hell
« Reply #15 on: February 26, 2016, 02:59:16 PM »
It looks like you can use it to buy long-term care insurance.  Otherwise, I'd buy a bunch of breast pumps and get reimbursed, then flip them on ebay or just return them to a store.  They're like $260 each.

JoJo

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Re: Accidental FSA Hell
« Reply #16 on: February 26, 2016, 03:18:45 PM »
Any upcoming foreign exotic travel?  Some of the travel shots are good for 10 years to a lifetime and are sometimes required (specifically yellow fever but can do Hep A, B and others).

NonprofitER

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Re: Accidental FSA Hell
« Reply #17 on: February 26, 2016, 03:19:43 PM »
This happened to us a couple years ago - the frustration! In a flurry of last minute activity, we were able to stock up on multiple pairs of glasses, contacts and contact solution.  I was also able to get 6 one hour massages. (YMMV). 


meandmyfamily

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Re: Accidental FSA Hell
« Reply #18 on: February 27, 2016, 06:40:22 PM »
LASIK if needed.  I highly recommend it.

Bracken_Joy

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Re: Accidental FSA Hell
« Reply #19 on: February 27, 2016, 06:57:08 PM »
It looks like you can use it to buy long-term care insurance.  Otherwise, I'd buy a bunch of breast pumps and get reimbursed, then flip them on ebay or just return them to a store.  They're like $260 each.

Breast pumps are now covered under ACA though, so is there much of a flip market?

https://www.healthcare.gov/coverage/breast-feeding-benefits/

green daisy

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Re: Accidental FSA Hell
« Reply #20 on: February 27, 2016, 09:18:54 PM »
Glucose monitors, pregnancy tests, fertility monitors, etc to flip. Are there any laws against selling things that were purchased with FSA funds? Are you overweight? Perhaps Weight Watchers...

You can also reimburse yourself for mileage for medical/dental appointments. 

Workingmomsaves

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Re: Accidental FSA Hell
« Reply #21 on: February 28, 2016, 06:58:33 AM »
You can get non-Rx sunglasses.  This is what we do if we don't use all our FSA.  You get the medical benefit of UV protection.

Bucksandreds

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Re: Accidental FSA Hell
« Reply #22 on: February 28, 2016, 06:59:29 AM »
Maybe prepay your dentist (if you've been with them awhile and they aren't about to retire) for the next few years of cleanings and X-rays/exams. Unless you have good dental insurance .

Bucksandreds

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Re: Accidental FSA Hell
« Reply #23 on: February 28, 2016, 07:00:24 AM »
You can get non-Rx sunglasses.  This is what we do if we don't use all our FSA.  You get the medical benefit of UV protection.

You maybe could buy a bunch and resell?

nobody123

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Re: Accidental FSA Hell
« Reply #24 on: February 28, 2016, 11:38:40 AM »
It looks like you can use it to buy long-term care insurance.  Otherwise, I'd buy a bunch of breast pumps and get reimbursed, then flip them on ebay or just return them to a store.  They're like $260 each.

Breast pumps are now covered under ACA though, so is there much of a flip market?

https://www.healthcare.gov/coverage/breast-feeding-benefits/

Who knows.  If you get one at Target, one at WalMart, one at Babies R Us, etc., you shouldn't have a problem returning them if they are unopened.  I was just thinking of the largest value item to minimize the number of returns you'd have to make.