Whether the early days of winter bring a smile to your face with visions of sugar plums dancing in your head or a certain dread that the holidays are coming whether you like it or not, there’s one fact that remains: the end of the year approaches faster than any of us like to admit. With that end of the year comes a reality concerning your health insurance that the met deductibles and those possible max out-of-pocket statuses will reset come January 1st.
So if you want to capitalize on maximum coverage of any medical insurances the time to act is now! And with that comes this article with four tips for you to consider as the end of the year approaches. Don’t let the end of the year pass you by without reviewing each tip and implementing them as you need and don’t let money be wasted!
1. Make sure to spend/request expenses for your Flexible Spending Account (FSA)
As you should already know if you have an FSA, that account offered by your employer allows you to contribute tax-free dollars to an account set aside specifically for eligible medical expenses. This is a really great option for individuals or families that know a certain portion of their income will be used for those specific expenses by allowing them to reduce their tax liability each year. But this also comes with a price – any amount left in the account at the end of the year (or after the grace period for spending/requesting that money expires – make sure to check with your employer!) is forfeited and you lose that money.
This first tip then is an important one as you really need to know your deadlines for getting both those medical expenses spent and additionally the deadline for getting those expenses submitted and subsequently reimbursed.
Unfortunately, we know from experience what it’s like to leave money on the table and lose that money. We learned the hard way that setting aside a few hundred (or thousand) dollars to reduce the amount of taxes you owe at the end of the year is worse than wasted if you just let the money in that account disappear. You know we’ve made about a million mistakes in our financial history (see our Deep in Debt to Debt Free story for more) and this happens to be yet another one of them.
But you don’t have to follow our terrible example from years gone by if you act now.
Check out these few short ideas to make sure you spend that FSA in full:
- Review your medical history for the year by checking your insurance company website – If you log into your medical insurance account you should get a full list of all the insurance claims made on your behalf this year. This is a great place to check out the amounts you spent both towards your deductible, co-payments and even prescription co-pays for the year.
- Check your credit card/checking account transactions online – Depending on your financial institution, you probably have access to all your transactions for the year at your fingertips. Searching for doctor office names or pharmacy locations might help you recall expenses you had long forgotten.
- Check for eligible medical expenses you might not have known qualify – The full list of eligible expenses are actually determined and listed by the IRS in Publication 502. I know it sounds a bit intimidating but it’s actually not too bad to review. Did you know that you can submit mileage for travel to and from your medical office visits? Apparently you can even submit expenses for meals at a hospital if your principal reason for being there is to get medical care. Even some expenses like a pregnancy test kit is covered as well if used to determine whether you or a dependent is expecting (umm, why else would you buy one?). Don’t forget to review that publication in full as you just might find some other expenses you didn’t quite expect to be eligible for reimbursement.
2. Order any medical supplies with enough time to process the order before the end of the year
We know there are a lot of people that depend upon various medical devices that are ordered from a medical supplier. For example, I use a CPAP machine and receive supplies at various times throughout the year varying from filters to a new mask dependent upon when my medical insurance determines I am eligible. As such, one of my deadlines happens to be towards the end of the year for a number of supplies.
From talking with the representatives, we learned that some companies determine the Date of Service by the date the supplies are shipped to your home. As such, confirm with your supplier if that is true for them and then make sure to order your supplies with enough time to allow for processing and shipping, especially factoring in any additional delays due to holidays (both days off and companies being short-staffed due to the time of year). In addition, ensure that you take into account any additional delays due to the medical supply office attempting to contact your primary care doctor for any reason (this could add multiple days to the process).
Any of these reasons could cause an order placed later in December to be delayed in shipping until the first part of January, meaning those supplies will not hit your strategically spent insurance for this year but instead apply against your deductible for the next. And if you think that calling and asking for them to backdate those supplies will be a possibility, then think again. The earlier you order those supplies the more certain you can be that they will be applied to this year’s insurance.
3. Schedule any known doctor appointments/surgeries prior to the end of the year
Another tip you’ll want to consider is ensuring that any expected doctor visits or even surgeries (we hope not for your sake!) are scheduled and occur prior to the end of the year. This is not the time to be procrastinating, waiting for another day to call your doctor for that appointment you know you need to schedule.
Unfortunately you might find that others have the same goal with the result of it being difficult to schedule an appointment this year with your doctor. If you find that your doctor’s schedule is fully booked, it doesn’t hurt to ask if they have a waiting list that you can be placed on. We have found in the past that being put on that list resulted in a much sooner appointment than we normally could have received as there are so many cancellations throughout the week. Obviously this means you will need to be prepared to adjust your schedule as necessary but this at least could help you see your doctor when there doesn’t seem to be another way.
4. Review your spending account and adjust your contributions to your Health Savings Account (HSA)
We understand this is confusing, but the HSA is similar in some nature but in other ways quite different from the FSA mentioned above. Both accounts allow you to set aside pre-tax dollars for reimbursement of eligible medical expenses. But in general the HSA is usually only available to individuals or families that subscribe to a high-deductible medical insurance plan whereas the FSA does not have that requirement. In addition, after electing the amount for the FSA, you can request reimbursement even in January for the full elected amount (even though you haven’t fully contributed to that full amount yet) whereas with the HSA you can only request reimbursement up to the available balance in the account. One general benefit of the HSA is that it rolls over each year and you can usually take the account with you even if you leave your job.
Another benefit with the HSA is that you should be able to change your contribution amount throughout the year. And as such, now is the perfect time to review all your medical expenses from this past year, consider all your expected expenses for the upcoming year (e.g., if you are planning to deliver a baby in the following year or have another medical procedure that might require additional funds) and find out now how you can increase your election for each paycheck to start planning for those future expenses now.
You might even determine that instead of expecting an increase in the amount of medical expenses for the upcoming year that the opposite is true: you might be expecting a huge decrease instead. As such, possibly consider trimming back those expenses to give you additional income to work towards your other financial goals (see our 52-Week Take Back Your Finances challenge to help you consider how to meet those financial goals).
No matter your plans, make sure to check with your accountant, company, insurance company and medical billing offices to understand the full implications of all these decisions. The best way to work through any and all financial decisions is by being intentional (see our 30-Day Be Intentional Challenge for more information on that) and making sure to not allow deadlines and dates slide by without a passing thought; instead take charge of your finances and show your money and medical insurance companies who’s boss.
We hope these tips help you save a bit more green this time of year or at the very least help you plan ahead to save some of that green next year. Feel free to leave any additional tips or ideas you would like to share with us and our readers on other ways to maximize your medical insurance at the end of the year.
I agree that you should use your Flexible Spending Account. You also said that any amount left in the account at the end of the year is forfeited. I think it’s a good idea to choose a medical insurance plan that has providers that are close to your work and home.
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