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By Kate Ashford
October 22, 2015
Only 22% of eligible workers use a health care FSA.
Only 22% of eligible workers use a health care FSA.
Zachary Zavislak

You already know some of next year’s medical bills: co-pays, prescriptions, maybe new glasses. Pretax cash deposited into a flexible spending account (FSA) is like found money, yet most folks don’t bother to pay these expenses, reports Mercer. “People are sometimes very shortsighted,” says Carolyn McClanahan, a financial planner in Jacksonville. Open enrollment starts soon. Here are three ways to get the most from your FSA.

Think beyond medical expenses. You can contribute up to $2,550 a year for approved health care expenses, but that’s not the only way to save. A dependent-care FSA can be used to fund before- and after-school care for kids under 13, licensed adult care for an elderly parent, and even day camp. Annual contribution limit: up to $5,000.

Plan how much to set aside. One hitch with FSAs had been that you’d lose what you didn’t use by year’s end. Many health plans provide online tools to help calculate your allocation. What’s more, six out of 10 employers now allow a $500 annual carryover. Ask your HR department.

Stretch your HSA. Even if you have a high-deductible health plan with a health savings account, you may be able to use a Limited Purpose FSA for vision and dental costs. That allows you to keep your HSA money invested—and growing.

Read next: Don’t Miss These 4 Big Benefits During Open Enrollment

Advertiser Disclosure

The purpose of this disclosure is to explain how we make money without charging you for our content.

Our mission is to help people at any stage of life make smart financial decisions through research, reporting, reviews, recommendations, and tools.

Earning your trust is essential to our success, and we believe transparency is critical to creating that trust. To that end, you should know that many or all of the companies featured here are partners who advertise with us.

Our content is free because our partners pay us a referral fee if you click on links or call any of the phone numbers on our site. If you choose to interact with the content on our site, we will likely receive compensation. If you don't, we will not be compensated. Ultimately the choice is yours.

Opinions are our own and our editors and staff writers are instructed to maintain editorial integrity, but compensation along with in-depth research will determine where, how, and in what order they appear on the page.

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