I have a question regarding employer sponsored Flexible Spending Accounts.
Can an employee give the remaining balance of their flex account, or purposely overpay for an expense at a doctor/dentist with the intention of the recipient holding the amount until future medical expenses (or planned medical expenses) arise?
For example: I have $2,500 in flexible spending this year. By October I have $1,100 remaining. Can I ask the dentist to overcharge me on my next cleaning by $1,000, so that I have a credit at the dentist office, which I can then use in January, combined with next year’s flex? Does this directly violate Flex rules?
Money paid to a provider from a flex plan must be to cover services in that flex plan year. You cannot pay for services this year that won’t be delivered until next year.
I looked into this when my daughter got braces. It got a little tricky because the orthodontist offered a discount for a lump sum payment up front but the services were going to be provided over two years.
I had figured that from reading it, and I’m glad you could confirm it. In addition to that, however, the deadline to spend it typically extends to the end of February, so you do have 2 months of overlap that you can use last year’s and the upcoming year’s all in one shot. Good for the big-ticket items.
Double-check that deadline. My FSAs have always required the service to be performed in the calendar year*, but you do have until the end of February to submit reimbursement. But you can’t charge a visit on 1/15/2014 to your 2013 FSA.
My braces anecdote: My FSA provider told me they would allow me to claim for the reimbursement of the full amount in any year that the service was rendered, so I could split it among the two years of treatment or charge it entirely to one of the years. YMMV, and laws may have changed.