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Personal Finance

Smart end-of-year moving: manage your benefits

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Whether you have a flexible spending account to use or lose or a more forgiving health savings account, you can get the most out of your health savings by taking certain actions at the end of the year.

If you’re worried about losing funds you’ve put aside in a flexible pre-tax health or dependent spending account, maybe because you’ve rescheduled medical appointments or your kids are stayed at home during the pandemic, relax. Legislation enacted in response to amended COVID-19 rules for flexible expense accounts. Instead of losing those funds at the end of the year, employers can change their plans to allow workers to carry over unused funds until 2022.

Normally, your employer may allow you to carry up to $ 550 of unused funds into a healthcare ASP for an additional 2.5 months (i.e. until March 15 of the following year), and you cannot carry over Dependent ASP funds. . But for 2021, employers can grant a 12-month grace period (until December 31, 2022) for both types of flexible accounts. This is especially important for dependent expense accounts, as Congress has allowed these FSA holders to pocket up to $ 10,500 in pre-tax wages in 2021, up from $ 5,000.

If your employer doesn’t provide a grace period, keep in mind that it’s easier to deplete unused funds in a health spending account than to use a dependents’ ASP. You can pay for COVID-19 home test kits, hand sanitizer, and masks. You can also use FSA funds to purchase over-the-counter medications, such as pain relievers, cough suppressants, and antihistamines. For a full list of eligible items, visit If you are unsure whether your employer offers a grace period, contact your human resources department as soon as possible.

If you have a Health Savings Account (HSA), you don’t have to run midnight at Walgreens because there is no deadline for using the funds in the account. But now is a good time to figure out how much you can afford to spend next year. For 2022, the annual HSA contribution limit for individual coverage increases from $ 3,600 to $ 3,650. If you have family coverage, the limit goes from $ 7,200 to $ 7,300. If you are 55 or older by the end of 2022, you can make an additional $ 1,000 in “catch-up” contributions.

To be eligible for an HSA, your 2022 health insurance policy must have a minimum deductible of $ 1,400 for individual coverage or $ 2,800 for family coverage. Haven’t maximized your 2021 HSA contributions? You have until April 15, 2022 to add to the account.

As is the case with a healthcare FSA, you can use funds from the HSA for personal protective equipment, such as masks and COVID test kits, as well as other reimbursable medical expenses. You cannot have both an FSA for healthcare and an HSA.

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