Flexible Spending Account Claims Strategies for Procrastinators

April 11, 2008

March 31st was the deadline for submitting our flexible spending account claims for 2007.  I mentioned in an earlier post a strategy you might use to spend any extra money in your FSA leftover at the end of the year.

I received some skeptical comments about the idea and someone even pointed out that even though it might work it was against the IRS regulations.  To avoid self-incrimination, I won’t publish whether it worked for me or not, all I can say is that it’d be worth your while to try it if you have money sitting around at the end of the year you don’t want to lose.

FSA Pre-Pay Tips
If you were going to try it, one tip is to not submit a claim for your entire balance on the last eligible day.  For example, if you had a balance of $345.50 and you send in a receipt for that exact amount with the service date of March 31st that might raise a red flag.

If you’re going to use the pre-pay strategy what you might do is call up your doctor several days before the deadline and have them charge you some random amount, say $158.30. Several days later, call back and have them bill you the remaining amount, $187.20.

Billing Questions
The person in the billing department may think it’s a strange request; I mean how many people usually call up and ask to pay ahead of time for a doctor’s visit?  The billing department is familiar with spending weeks or months trying to get people to pay their bills so a patient request to pay early will likely be a foreign concept.  If they ask why you want to pre-pay, I’d just explain your situation and see if they’ll work with you.

Submission Deadline “Loophole”
One other strategy you might be able to use is something I stumbled across by accident.  I submitted two separate claims to our flexible spending account provider but when I checked for reimbursement I noticed only one had been paid.  When I called up to follow up on the second claim, I was told the fax had been received but some of the pages were too light to read.  They couldn’t process the request; I’d have to resubmit my information. 

At first I was a little upset since I had submitted the forms weeks ago and they didn’t call to let me know there was an issue.  However, I verified that even though it’s now past the deadline I could still resubmit my claim since the original forms came in prior to the deadline.

This information could potentially come in valuable for some procrastinator who’s sitting at work on the day of the deadline and remembers that they didn’t submit their information.  One option they have is to fax over a claim form followed by several unreadable pages.  Obviously the identifying information will need to be legible so they know it’s you who submitted. 

If their flexible spending account administrator has the same policies as mine, they can go home that night, get their receipts together, and resubmit the next day.  Since the original request came through before the deadline they might still accept it.

Flexible Spending Account Advice
Of course, none of the things I’ve mentioned are guaranteed to work; try them at your own risk.  It’s obviously best to spend your flexible spending account balance prior to the deadline and submit your forms on time. 

Personally, I think the current system is not the most consumer friendly.  Having to guess at how much you’ll spend, trying to get it all spent by the end of the year, and submitting receipt after receipt make the whole ordeal almost not worth the tax savings.  Of course every little tax reduction makes a difference so I’ll continue to use our FSA.  Maybe someday my company will offer a Health Savings Account but until then I’ll keep slogging through the FSA swamp.


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Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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3 Responses to Flexible Spending Account Claims Strategies for Procrastinators

  • kitty

    Good tips. I agree that FSA isn’t user friendly. I am either scrambling to spend the money or end up having unexpected expenses – e.g. this year I broke part of my tooth wall while biting on a bone; ended up needing an unplanned-for crown.

    Don’t hold your breath for HSA though. It goes with such a high deductible that reasonably healthy people have no prayer of spending in a year. My company offers HSA. If I were to take advantage of this plan, virtually all of my meddical expenses would be out-of-pocket.


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