Flexible spending accounts (or FSA's) are a great tool to save money on healthcare, especially if you or someone in your family suffers from a chronic medical condition. If you use oxygen therapy, a flexible spending account can be a smart way to cover special equipment and out-of-pocket costs.
Unfortunately, many people who use oxygen don't take full advantage of their FSA. You can use your FSA to buy all kinds of oxygen therapy supplies, but many people don't realize this or don't think beyond the basics.
The truth is, you can use your FSA to cover just about any oxygen supplies and equipment that your insurance won't cover. That includes small things—like softer tubing or your preferred brand of nasal cannula—and large things—like a brand new portable oxygen concentrator.
But if you have an FSA, you've probably experienced the end-of-year anxiety that comes before your plan expires. This time of year often signals a mad rush to use up FSA money before the funds are lost forever.
When this time comes, too many people spend their extra funds on the first, most convenient things that come to mind. While this isn't always a bad thing, many people are simply not aware of all their options and how they can put that money to best use.
Fortunately, there is a huge number of things you can purchase with your FSA, and it's easy to use up extra funds if you know what your options are. In fact, extra FSA money at the end of the year provides the perfect opportunity to invest in a portable oxygen concentrator or other oxygen supplies you've been wanting to buy.
In this post, we're going to explain how your FSA works and how you can make the most out of your funds before they expire. We'll explain what kinds of purchases are eligible, help you understand FSA restrictions, and give you some practical ideas of what to spend your extra FSA funds on.
Using oxygen isn't always easy, and it's important to utilize all of the options you have to improve the comfort and convenience of oxygen therapy. To learn more, continue reading this article to find out how you can use your FSA to fund a new oxygen concentrator for yourself or a loved one this year.
Here's a quick overview of the information we'll cover in this guide:
- What an FSA is and how it works
- How to understand FSA plan years and when funds expire
- Limitations on how you can spend your FSA
- How to use up your FSA funds before they expire
- What kinds of oxygen supplies are eligible for FSA funds
- How to buy a portable oxygen concentrator with FSA funds
- What kinds of mobility aids qualify for FSA funds
- How and when you can use your FSA funds on someone in your family
How Does an FSA Work?
If you're already very familiar with what an FSA is and what it does, then feel free to skip ahead to the next section. This section is for those of you who aren't quite sure how an FSA works.
This section may also be helpful if you're a bit fuzzy on the details or need a quick refresher on what kinds of expenses you can pay for with your FSA.
What is an FSA?
An FSA, or Flexible Spending Account, is a type of spending account specifically for health and medical expenses. You can only get an FSA through an employer, and you put money in the account by taking it directly out of your earnings.
However, there are limits on what you can use your FSA funds for; in general, you can only use them to pay for out-of-pocket healthcare costs for yourself, your spouse, and your dependents. You also have to use up the money in your FSA by the end of every year, otherwise you lose the unspent amount.
The only way to put money into your FSA account is to get it deducted automatically from your paychecks. In general, you have to decide on an amount to contribute for the whole year and you can't change it until the new plan year starts.
The greatest benefit of having an FSA is that whatever money you put into it is income tax exempt. That means that you get to keep the full amount, before taxes, of any earnings you put in your FSA account.
For example, let's assume your income tax rate is about 30%, and you decide to contribute $300 from your paycheck to your FSA. Normally, you would have to pay $90 in taxes on that $300; however, since you decided to contribute that money to your FSA, you don't pay any income taxes and get to keep the full $300.
Because of this, there is always a limit to how much money you can contribute to your FSA account every year. The law limits each person to a maximum of 2,650 yearly, but your employer might limit your contribution to a different amount.
Many people try to max out their FSA every year to take full advantage of its tax saving benefits. Since you can use your FSA to cover such a wide range of healthcare expenses, it's generally not very difficult to find a way to use up extra funds.
An FSA is a great way to set money aside for future medical expenses like medications, operations, and medical equipment that your insurance doesn't cover. This can be especially useful for seniors, families with children, people with chronic diseases, and anyone who faces large or unpredictable healthcare costs.
When you need to spend the money in your FSA account on a medical expense, there are two main ways you can do that. First, you can pay the amount yourself and then submit a claim to get reimbursed from your FSA, or you can use a FlexCard to pay expenses directly from your account.
Here is a quick overview of some of the key features and benefits of using an FSA:
- You can contribute whatever amount you'd like every month, up to a maximum of $2,650 per year.
- The amount you contribute to your FSA gets taken directly from your paycheck.
- Any income you contribute to your FSA is income tax exempt.
- Your employer may choose to match the amount you contribute to your FSA up to a certain amount.
Now that we've covered what an FSA is, let's take a closer look at how it works. In order to use your FSA legally and get the most out of your account, it's vital to understand how FSA funds expire and what kinds of expenses you are allowed to pay for with your FSA.
The Funds in Your FSA Expire Every Year
FSA accounts work on a year-long cycle. At the beginning of every plan year, your accounts starts at $0, and any money you put in the account throughout the year has to be spent before the plan year ends.
At the beginning of the next year, your account gets reset to zero again, and any funds leftover from the previous year get forfeited. That's why it's very important to use all of the money in your account before it expires.
While the start and end of most FSA plan years usually align with the calendar year, this is not always the case. To avoid losing your hard-earned funds, make sure you know the exact date that your FSA plan ends and don't lose track of it throughout the year.
If You Don't Use It, You Will Probably Lose It
Even if you have money left over in your FSA account, you will lose it forever after the start of the new plan year. Because of this, many people spend December looking for useful ways to spend away the rest of the money in their accounts.
There are some exceptions, however; some FSA plans give you a month or two grace period to use unspent funds after the end of your plan year. Alternatively, the Affordable Care Act allows employers who don't offer a grace period to allow employees to roll over up to $500 in unspent funds from the previous year.
How your FSA works depends on the particular plan offered by your employer. Regardless, under most plans you stand to lose a significant amount of your balance if you don't use it up by the end of your plan year.
Fortunately, there are plenty of ways to use up all your hard-earned FSA funds before they expire. Even if the deadline is close, there's nothing to stop you from going on a last-minute healthcare shopping spree.
There are Strict Limitations on How You Can Spend Your FSA
FSA funds can only be used to pay for qualified medical expenses, which the IRS defines as “costs of the diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body.” However, when it comes to the specifics of what you can and cannot pay for using FSA funds, the rules can be somewhat vague.
The IRS also specifies that the healthcare expense must also be used “primarily to alleviate or prevent a physical disability or illness.” However, expenses related to general health, such as vitamins and health foods, are not considered qualified medical expenses.
We'll go into greater detail on what kinds of supplies and equipment do and don't count as qualified FSA expenses in this next section. In the following sections, we'll lay out exactly what kinds of oxygen supplies, oxygen equipment, and other helpful supplies you can purchase with your FSA.
What You CAN Purchase with FSA Funds
Here is a list of some general healthcare expenses that are qualified for FSA funds:
- Medical care that you receive from any legal medical practitioner, including physicians, surgeons, dentists, and other specialists.
- Medical equipment, medical supplies, and diagnostic devices needed for medical purposes (e.g. first aid supplies, oxygen therapy supplies, and blood sugar test kits)
- Prescription medications
- The cost of your health insurance premium (but not dental insurance)
- Transportation costs you incur traveling to and from medical care
- Long-term care services (and, in some cases, some of the costs of long-term care insurance)
- Over-the-counter medications, but only if you have a doctor's prescription (excluding insulin)
Here is a list of some common products that qualify as medical equipment and supplies:
- First aid kits
- Blood pressure monitors
- Prenatal vitamins
- Adaptive mobility aids (e.g. shower chairs)
- Oxygen equipment and maintenance products
What You May NOT Purchase with FSA Funds
Here is a list of some general healthcare expenses that are NOT qualified for FSA funds:
- Any “general health” items that are not needed to treat or prevent a specific illness, disease, or medical condition
- Toothbrushes and over-the-counter dental products
- Over-the-counter medications without a prescription
- Fitness trackers and pedometers
- Gym memberships and exercise equipment
- CBD products and medical marijuana
- Cosmetic procedures
- Dental insurance premiums
- Feminine hygiene products
- Hair loss products
- Medicare alternative insurance premiums
- Medicare part B insurance
Here are a couple more great resources for figuring out what specific things you can and cannot buy with FSA funds:
You CAN Buy Oxygen Equipment and Supplies with FSA Funds
Fortunately for people who use oxygen, you can use FSA funds to pay for medical equipment and supplies that are necessary for oxygen therapy. That includes the cost of oxygen and oxygen equipment used to “relieve breathing problems caused by a medical condition.”
In the following sections, we'll go into more detail about exactly what kinds of oxygen supplies and equipment count as qualified health expenses. We'll also show you how you can use your FSA to pay for pricier equipment that may be difficult to fund otherwise, such as a portable oxygen concentrator.
How to Use Up Your FSA Funds Before They Expire
You can get the most out of your FSA by thinking outside the box and considering all your different spending options. That's why it's important to understand your FSA's full potential, and that it can be used to cover much more than basic costs like co-pays and prescriptions.
If you use supplemental oxygen, you can use your FSA pay for all kinds of practical supplies to make your daily life easier. For example, you can use FSA funds to purchase a shower chair for your home or get that high-flow nasal cannula you've always wanted to try.
There is a wide variety of FSA-qualified oxygen therapy equipment, adaptive mobility aids, and other supplies you can choose from. You can use your FSA to pay for small equipment expenses and for more expensive devices like portable oxygen concentrators.
In the following sections, we're going to give you some ideas for how to use FSA funds on oxygen and mobility supplies that will actually make a difference in your life. From portable oxygen concentrators to mobility aids to luxury oxygen equipment, we'll show you a variety of practical items that can improve your quality of life.
Since the money in your FSA account disappears at the end of the year, you should think about how to use up the entire balance before that date comes. Luckily, there is a plethora of worthwhile things you can purchase with your FSA, many of which you might not have thought about before on your own.
You Can Buy a Portable Oxygen Concentrator
If you've ever considered buying a new or used portable oxygen concentrator but worried about the price, you can always fund the purchase through your FSA. It's a great way to use up extra FSA funds, and it's one of the most worthwhile investments that someone who uses supplemental oxygen can make.
A portable oxygen concentrator allows you to take oxygen with you anywhere you go, without having to handle any bulky equipment. They are some of the lightest, safest, and most hassle-free oxygen sources available, and having one can be life-changing in the best possible way.
A portable oxygen concentrator allows you to move freely without being tethered to a stationary oxygen concentrator or heavy oxygen tank. This allows you to take back some of the freedom you lose when you have to use supplemental oxygen.
Buying a portable oxygen concentrator is a long-term investment that is also immediately practical; it is something you can utilize both inside and outside your home every day. Portable concentrators are also durable, high-quality pieces of equipment that you can benefit from for many years to come.
There are many different types of oxygen concentrators available in a variety of sizes and with a range of useful features. To learn more about the best portable oxygen concentrators on the market, check out the following links:
- The best portable oxygen concentrators of 2018
- Top 4 continuous flow portable oxygen concentrators
- Top 4 pulse flow portable oxygen concentrators
How to Pay for a Portable Oxygen Concentrator with FSA Funds
Even if you don't have enough money in your FSA to pay the entire price of a portable oxygen concentrator, you can still use it to cover part of the cost. Whether you have $200 or $2,000 in your account, you can put as much of it as you like toward the balance and use another payment method for the rest.
Here at Life Point Medical, we offer great financing options that can make it even easier to pay for a new or used portable oxygen concentrator with your FSA. You can cover the initial cost with the money in your account right now, and then pay for the rest over time with low monthly payments.
You Can Buy a Variety of Oxygen Equipment and Supplies
If you use oxygen for any reason, you can get the most out of your extra FSA funds by spending them on new oxygen supplies. There is a wide variety of FSA-qualified oxygen equipment and maintenance items that can make oxygen therapy more comfortable.
In general, you can use your FSA to pay for the following oxygen supplies:
- Oxygen concentrators and accessories, including:
- Battery packs and power cords
- Oxygen equipment maintenance items, including:
- Cleansing wipes
- Disinfecting and deodorant sprays
- Oxygen delivery supplies, including:
- Nasal cannulae & oxygen masks
- Extension tubing
- Humidifier bottles
- Nebulizer equipment
- Hyperbaric oxygen therapy
- CPAP/BiPAP machines and accessories, including:
- CPAP machines
- CPAP headgear
- CPAP equipment cleaning supplies
Your FSA is also a great way to fund specialty oxygen equipment, which is often pricier than the standard equipment most oxygen suppliers offer. For example, you could use your FSA funds to buy more comfortable nasal cannulae or higher quality tubing supplies.
In general, you can use your FDA to pay for any oxygen therapy supplies that your insurance won't cover. To learn more about the many different types of nasal cannulae, oxygen masks, tubing, and more that you have to choose from, take a look at our guide on making oxygen therapy more comfortable.
There are many different kinds of specialty oxygen supplies you can buy that are designed to make oxygen therapy more comfortable and convenient. For now, here are a few ideas to get you started.
Examples of oxygen supplies that are eligible for FSA funds:
- High-flow nasal cannulae
- Nasal cannulae with soft tubing and comfort features
- A finger pulse oximeter to monitor your blood oxygen saturation
- Comfortable oxygen masks
- Replacement extension tubing
- Humidifier bottles that attach to your oxygen delivery equipment
- Sanitizing sprays and solutions for cleaning your oxygen equipment
- An extra battery for your portable oxygen concentrator
- Replacement filters for your portable or stationary oxygen concentrator
- CPAP/BiPAP masks
You can also purchase a variety of FSA-eligible oxygen and CPAP supplies from our online store. We offer a variety of different CPAP machines and accessories, portable oxygen concentrators, and other oxygen supplies.
You Can Buy a Variety of Qualified Mobility Aids
Living with a chronic condition that requires supplemental oxygen can be difficult. Many people who use oxygen suffer from breathlessness and other physical ailments that limit their mobility and interfere with daily activities.
The good news is that you can use your FSA to pay for many different types of adaptive equipment to make daily living easier. In general, adaptive mobility aids for bathing, dressing, and feeding all qualify for FSA funds.
In some cases, you might need to provide proof that your adaptive equipment is necessary. If proof is required, you will need to have your doctor write a letter of medical necessity (LMN) explaining why you need the equipment for your health and how it will improve your standard of living.
Here is a list of some common mobility aids and equipment you can purchase through your FSA:
- Shower chairs
- Shower grab bars
- Tub seats
- Bath transfers
- Dressing sticks and sock dressing aids
- Long-handled dressing tools (e.g. shoe horn, zipper pull, button hook)
- Toilet modifications
- Adapted dishware and utensils for eating
- Mobility scooters (with a LMN)
Our online store offers a variety of FSA-eligible adaptive equipment that may be helpful for you if you use oxygen or suffer from limited mobility.
In Some Cases, You Can Spend Your FSA on Someone Beside Yourself
In the case that you don't need the rest of your FSA money for yourself, you can spend your FSA funds on your immediate dependents. In some cases, you can even use your FSA for a member of your extended family.
As long as you provide at least half of their financial support, you may be able to use the money in your FSA account to pay for medical care, supplies, and equipment for that person. This can be a great way to support a loved one who uses oxygen or suffers from a chronic disease.
In general, you can use your FSA funds to support the following family members:
- Your legal spouse (as long as you were married when the medical expenses occurred)
- Your dependent children (referred to by the IRS as “qualifying children”)
- This includes biological and adopted children under the age of 19, but only if you provide more than half of their financial support, and only if they lived with you for at least half of the past year.
- This includes children of divorced or legally separated parents who qualify to be treated as a dependent (certain constraints apply)
- A “qualifying relative” for whom you have provided more than half of the financial support for last year
- This includes children, stepchildren, foster children, brothers and half-brothers, sisters and half-sisters, fathers and step-fathers, mothers and step-mothers, etc.
- This can include someone besides your spouse who lived with you as a member of your household for an entire year
- A qualifying relative that you provide joint support for under a multiple support agreement, but only if you provide more than half of the support for that relative (certain constraints apply)
The details of who qualifies for your FSA funds can get tricky, so make sure to review the rules yourself if you aren't sure whether or not someone qualifies to use your FSA funds. You can check with your FSA provider or visit healthcare.gov for more information.
As long as you meet the proper criteria, you can use your FSA to give a life-changing gift to someone you love. For more information about dependents, qualifying family members, and other things related to how you can use your FSA funds, visit FSAfeds.com.
Don't Miss Your Chance to Upgrade Your Oxygen Therapy!
It's important to put some thought into how to use up your FSA money before you lose it at the end of the year. If you don't spend it carefully, you could end up with a whole stock of useless supplies and things you don't really need.
Often, using leftover FSA funds on something more substantial is better than whittling away at it with small-ticket purchases. Unfortunately, many people never even think about using their FSA funds to invest in more expensive healthcare items like better medical equipment.
On the other hand, if you use your FSA funds wisely, you can fund expenses and equipment that you otherwise may not have been able to afford. It is particularly important to put your FSA money to good use if you have a chronic medical condition, such as a respiratory condition that requires you to use supplemental oxygen and pay for extra medical supplies.
If you, your spouse, or your dependents use oxygen, you can use your FSA to purchase oxygen equipment that can dramatically improve your quality of life. Investing in a portable oxygen concentrator, for example, can remove many of the limitations that using oxygen imposes on your daily life and allow you be more active, more mobile, and more free.
Using your FSA to buy high-quality medical equipment can yield benefits that last for years to come. With a bit of thought and planning, you can make sure that every cent in your FSA goes toward something useful and worthwhile to you.