Now What?!?

[cbg]

They can CLAIM the money in an FSA until the end of the year, or possibly even longer. Ours allows claims for, say, 2011 until March 15 of 2012.

However, unless they elect to continue the FSA on COBRA (which means making contributions out of post tax dollars which completely defeats the general purpose) only expenses incurred while still employed will be approved.

 

[commentator]

Eeeeuuwww, that'd be a huge downside to having an FSA, in my opinion! I've seen too many businesses close without much warning. Dreadful! So if the OP wants to get the good out of that $2000, she needs to have some kind of major covered medical expense before Oct 29th. Physicals for all the kids and herself?

 

[LillianX]

Eeeeuuwww, that'd be a huge downside to having an FSA, in my opinion! I've seen too many businesses close without much warning. Dreadful! So if the OP wants to get the good out of that $2000, she needs to have some kind of major covered medical expense before Oct 29th. Physicals for all the kids and herself?

Anyone need glasses? Even if not, an extra pair is a good idea. Breaking your glasses is no fun.

Everyone is good to go on dental work?

I rarely recommend a chiropractor, but it's a good way to blow a few hundred bucks before you lose it anyway.

Sometimes, OTC medications are covered. Stock up!

 

[cbg]

You never, ever, ever want to put more money into an FSA than you have a reasonable expectation of using. Remember, the money isn't all taken out at once. It's taken out in equal increments over the course of the year. For easy arithmetic, let's say that you are paid monthly and you are putting in $1200 for the year. If the company closes February 1, the maximum you would lose is $100. The rest has not been taken out yet.

Nor do you have to use it for what you initially intended. If you were going to use it for a surgical procedure that you were going to have in July but the company closes February 1, sometime during January go get yourself a spare pair of glasses. Or schedule your six-month visit to the dentist. Or take this opportunity to go to a smoking cessation seminar. Or even (whisper) buy some condoms. All of which are eligible expenses.

Remember too that the use-it-or-lose-it goes both ways. On a medical FSA, you can withdraw money before it's actually been deducted. Using the same example as above, if you have a $1,200 eligible expense on January 2, you can claim the entire $1,200 on January 3, and if the company closes on February 1 the company cannot come back to you for the other $1,100.

 

[cbg]

Sometimes, OTC medications are covered. Stock up!

By Federal law, OTC medications can no longer be covered except in some limited circumstances when a doctor writes you a script for them.

 

[RemitAdvice]

You never, ever, ever want to put more money into an FSA than you have a reasonable expectation of using. Remember, the money isn't all taken out at once. It's taken out in equal increments over the course of the year. For easy arithmetic, let's say that you are paid monthly and you are putting in $1200 for the year. If the company closes February 1, the maximum you would lose is $100. The rest has not been taken out yet.

Nor do you have to use it for what you initially intended. If you were going to use it for a surgical procedure that you were going to have in July but the company closes February 1, sometime during January go get yourself a spare pair of glasses. Or schedule your six-month visit to the dentist. Or take this opportunity to go to a smoking cessation seminar. Or even (whisper) buy some condoms. All of which are eligible expenses.

Remember too that the use-it-or-lose-it goes both ways. On a medical FSA, you can withdraw money before it's actually been deducted. Using the same example as above, if you have a $1,200 eligible expense on January 2, you can claim the entire $1,200 on January 3, and if the company closes on February 1 the company cannot come back to you for the other $1,100.

The both way thing is correct. However, my $$ is considered 'denpendent care expenses' and can only be used for such. I calculated my yearly dependent care, then funnelled that money into FSA, now my company is closing and I'll lose the money unless I incur the childcare expenses BEFORE 10/25.

 

[cbg]

That's true; by law dependent care expenses can only be claimed after they've been deducted. However, it is also true that the money is deducted in equal increments over the year so that the amount deducted will be pro-rated against what you initially pledged. So if you made your calculations correctly at the beginning of the year, you should come out even.

 

[RemitAdvice]

That's true; by law dependent care expenses can only be claimed after they've been deducted. However, it is also true that the money is deducted in equal increments over the year so that the amount deducted will be pro-rated against what you initially pledged. So if you made your calculations correctly at the beginning of the year, you should come out even.

Riiiiiiiight. Except in this case I had calculated through the end of the year. Now I only have until 10/24 to incur expenses and until 11/24 to claim them.

Sound right? I mean, am I missing absolutely anything?? Anything that could help me at all?

 

[cbg]

Honestly? Yes, I think you are. Either that or I am.

If you budgeted $2,000 for the year, that should represent the costs for 12 months, correct? When the company closes at the end of October, they will have deducted 10/12's of $2,000, or roughly $1,666. Your expenses for January through October should be somewhere in that vicinity.

In other words, if you have significantly more money left in the account at the end of October, after claiming all your eligible expenses for January through October, then your calculations at the beginning of the year were off and you'd have an excess in the account no matter what.

If you're still not seeing what I'm saying, cuz it is kind of confusing, then when you post back, tell me EXACTLY what your monthly eligible expenses are (or weekly or whatever is appropriate), EXACTLY what you pledged for the year and EXACTLY how much is deducted from each paycheck - also how often you were paid. We can get it sorted out.

(This is what I do for a living -it's harder to see when you don't work with it every day )