Excerpt from New York Times: F.S.A. vs. H.S.A.: What to Know About the Accounts That Pay Medical Costs
Sara Taylor, senior director of employee spending accounts at the benefits consultant WTW, suggests taking a close look at your past medical expenses before deciding how much to contribute to your F.S.A. “It’s hard to do, for some people,” she said. But looking at your “explanation of benefits” for last year — the forms that describe what treatments you had and what share of the cost you owe — can help you come up with a reasonable number. Was last year an anomaly because you had major surgery? If so, you may want to contribute a lower amount. Many employers offer online tools to help you make an estimate.
It also helps to know what you can spend F.S.A. money on. That way, if you find yourself with a balance at the end of the year, you can use the money to buy eligible over-the-counter items like pain medication and even sunscreen. A helpful resource is the F.S.A. Store, which includes an online alphabetical list of eligible and ineligible items.