Medical Flexible Spending account (Medical FSA or Health FSA)
The Medical Flexible spending account is the most popular type of FSA is used to pay for medical expenses not paid by any insurance; the most common expenses would be co-payments at doctors and hospitals, prescription drug costs, insurance deductibles and coinsurance. Starting January 1, 2011 participants of Medical FSA will not be able to claim expenses for over-the-counter drugs and medicines without a doctor’s prescription.
Medical FSA Contribution limit
Currently employers can offer any maximum annual election for their employees, but the recent health care reform (Patient Protection and Affordable Care Act) amended the rules that starting January 1st, 2013 employer sponsored Cafeteria Plans should not allow employees to choose an annual election of more than $2500.
How to withdraw the Medical FSA funds?
Different plan administrators adopt different methods of reimbursement, but in each case you have to substantiate your claims with valid receipts.
Lately a large portion of plan administrators are offering the debit cards to the Medical FSA participants, so that you can use the card at any pharmacy or at a participating health care provider. Since Medical FSA is a pre-funded plan, you can start using your debit card right away instead of waiting until the end of the year or money deducted from your pay check.
If debit card is not an option for you, you would need to follow your plan administrator’s procedures to claim the funds. This is usually completing a reimbursement form and submits it to your plan administrator along with the receipts.
In most cases the last date to claim your Medical Flexible Spending account funds is March 15th of the following year. After this date any money remaining in your account will be forfeited.
It is always advised to keep all your co-pay and other medical receipts until you claim all your funds from your Medical FSA.