Did you know that 30 million Americans who have paid into their FSAs end up leaving about $450 million of tax-free money unclaimed by the time the deadline rolls around. That’s what Jeremy Miller says, founder and president of FSAStore.com, a one-stop shopping site for FSA-friendly products and services. Remember, when it comes to Flexible Spending Accounts (FSAs), you use it or lose it.

And where does all that unspent money go? Not in your wallet, but back to the people who really don’t need it…your employers.

So how do you minimize your losses and maximize your flexible spending account?

1. Find out what’s covered.
   Ok, so you may need a prescription for over-the-counter drugs now but there are plenty of other things for which you can get reimbursed. According to Miller, “There are 24,000 products that fit the FSA requirements, from first aid to family planning, and FSAStore sells 4,000 of those products.” Allocating less than last year because of the prescription drug change is a mistake.
2. Know Your Deadline.
   A large majority companies require that you deplete your FSA account by the end of the year although there are some companies that provide you with another 3 month grace period. That means you have until March to take care of yourself and your family with 2010 dollars. Make sure you know what your company does.
3. Turnaround the paperwork ASAP.
   Even if your company provides you with a 3 month extension, the date to file your reimbursement requests may be sooner. Don’t wait! Take a look at your annual receipts. Co-pays or other relevant medical fees are eligible for reimbursement. Get them in…now!
4. Check, double-check, and (okay) triple-check.
   Know your balance and the deductions against it. Treat it like a checking account that you want to get to a zero balance.

Follow these four easy steps, and you won’t be giving your hard-earned money back to your employer.

Managing your family’s health care these days is not an easy matter. In fact, it can be downright “mind-boggling.” But good news may be on the horizon. A few lawmakers, it seems, understand this and are working towards significantly changing the way flexible spending plans, or FSAs, work.

Back in March, the Medical Flexible Spending Improvement Act (S. 1404) was introduced in the Senate with the goal of allowing employees to withdraw and pay taxes on any remaining funds in their flexible spending accounts at the end of the year. This would end the controversial “use it or lose it” issue that has caused many people to try and fit in dental visits or buy a pair of eyeglasses in order to deplete their FSA balance by December.

Although many consumers seem to make good use of their FSAs throughout the year, it’s recognized that some logical adjustments need to be made on how they are regulated. For instance, it can be difficult to guess in advance how much money it makes sense to set aside for health care in a given year, and unlike Health Savings Accounts (or HSAs), there’s currently no opportunity to roll over funds into the next year.

According to Maryland Senator Ben Cardin, “It is time to modernize FSAs to eliminate the burdensome ‘use it or lose it’ rule. It is both fair and sound health policy to allow FSA participants to cash-out remaining funds at the end of the plan year rather than forfeiting the balance to their employer.”

Save Flexible Spending Plans, an advocacy group for FSAs, is encouraging Americans to “remind Congress flexible spending accounts are part of the solution, not part of the problem.” Stay tuned!

Flexible Spending Accounts or FSAs have become very popular with budget conscious consumers. Why? Because the money that goes into these accounts are not taxed and thereby reduce your overall eligible medical costs by about 20%. Unfortunately, these accounts, which are known for their generous list of eligible expenses and utilized by one in three employees, are about to get a lot less flexible in 2011. New flexible spending account rules that were designed to raise additional tax revenue to offset the costs of the health care reform bill will be going into effect on January 1, and you need to be ready for them. The following 30 second video clip highlights the changes for 2011…are you ready?