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Calculating how much to contribute to your flexible spending account (FSA) can take time, if you have never done this before. However, it is well worth the time used. If this is the first time you have used an FSA, you should play it conservatively until you know your actual usage patterns. The most common things people use FSA contributions for include paying for annual deductibles, co-pays, and goods and services not otherwise covered by your family health insurance plan. These services include things such as eyeglasses, over-the-counter medications used to treat diagnosed conditions, and co-pays for dental care.
For example, if you have a child with lactose intolerance, you probably go through Lactaid tablets fairly often. At anywhere from $7 to $14 a box, save your receipts, and you can get reimbursed for them. In fact, you will need to get in the habit of saving your receipts for all out-of-pocket medical expenses, including co-pays for office visits, prescriptions, and any other approved expenses. If you keep these receipts, then once a month you can fill out a simple claim form and mail or fax your receipts in. It usually takes anywhere from two to four weeks to get your check. Keep copies of anything you submit. If there is a problem with the paperwork, you can refer back to your receipts.
Keep in mind that the money you contribute in a given calendar year must be used to pay for goods or services received in that calendar year, but you have until March of the following year to submit your claim. It is a good idea to check your balance in October to see if you are at risk of forfeiting any money. If you still have not used your full balance, start scheduling appointments and stocking up on prescriptions and over-the-counter medications before the end of the calendar year.