NEW YORK (CNN/Money) -
Flex-spending accounts allow employees to set aside pre-tax dollars to meet health care costs. But as anyone with one of these accounts knows, whatever you don't use, you lose!
With the end of the year creeping closer and closer, you may need to do some creative spending -- and fast. Here are 5 Tips to help you put your flex dollars to good use.
1. Stock up.
While there's no maximum contribution limit mandated by the federal government, most companies limit contributions to approximately $3,000 per year.
So, if you've got money left to burn near the end of the year, now's the time to go shopping. (We're not talking about Bloomies here).
Consider stocking up on medications like Claritin, Prilosec and Zantac that are now available without a prescription. Previously, you couldn't use flex-spending account dollars for on over-the-counter medications. But now over-the-counter drugs are eligible for reimbursement. That's pretty helpful as these medications can be more expensive than prescription drugs covered by insurance.
Just remember, vanity items like cosmetics, teeth whitening and hair removal kits are not generally covered. For more information on what's eligible for reimbursement under federal law go to www.fsafeds.com.
2. Opt for an alternative.
Did you know expenses from acupuncture, massage therapy and chiropractic care can be eligible for reimbursement? In many cases they are, but there are conditions.
Acupuncture and chiropractors are typically covered, but in the case of massage therapy, it may not be unless it has been prescribed by a doctor to treat a specific medical condition.
The bottom line, before you pony up for any expense you plan on getting reimbursed for, you'll want to check with your plan administrator or employer.
3. Buy some wellness.
"These plans offer so much flexibility now, there's almost no excuse now to have a forfeiture in your Flex Spending Account," says Andy Anderson of Hewitt Associates, a benefits outsourcing firm.
If you've got money left over, one way to maximize your benefits, according to Andersen, is making wellness appointments for yourself -- like appointments with specialists, physical therapists and allergists.
According to Hewitt, employees can also use money in their accounts to pay for new glasses, prescription sunglasses or contacts. If you've been considering laser eye surgery, now may be the time to take the plunge if you're a candidate for the procedure. In most cases, it's a "covered elective surgery".
If your doctor has advised you to quit smoking, your smoking cessation program may also be reimbursable. Again, before you sign up for any procedure, you'll want to check with your plan administrator or employer.
4. Take care of the family.
You may want to look into a dependant care flex spending account which allow employees to set aside pre-tax dollars to cover day care expenses for dependants.
According to Hewitt, expenses must be for dependents under age 13 or disabled or elderly dependents requiring adult day care. Hewitt says employees should consider enrolling if both household spouses work or attend school full time or if they're a single working parent with dependent children.
Once you've decided how much to contribute to the account, you can't change your mind during the year unless you have a "change in status" such as the birth of another child, divorce or death. However, you can adjust your contributions if the cost of day care changes or your child reaches age 14.
Each household can contribute up to $5,000 pre-tax. If you or your spouse earn more than $85,000 per year, your contribution limits may be reduced. For that reason, Hewitt says, you may want to consider having the lesser-paid spouse enroll in their employer's dependent care spending account.
And remember, just like regular flex spending accounts, if you don't use all the money, you'll lose it!
5. Enroll now.
While it may be too late to open one of these accounts this year, now is the time to think about your benefits selections for coming year.
According to David Wilson, President of FlexBen Corp., benefit enrollment periods usually begin as early as first week of October or as late as second week of November -- and typically last three to four weeks.
Gerri Willis is a personal finance editor for CNN Business News. Willis also hosts CNNfn's Open House, weekdays from Noon to 12:30 p.m. (ET). E-mail comments to 5tips@cnn.com.
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