by Hope
I renewed my debt payment plan with a series of small baby steps this fall. My next plan is to tackle some recent medical bills. You can see my first baby steps here:
With the new year, I’m ready to implement some new plans, ie baby steps. Over the last few months, I’ve had some “could have been serious” medical issues which results in visits to a Neurologist and then some testing. While I had some money left in my FSA account for 2017, there wasn’t enough to cover everything.
Questions
I chose to max out my FSA again in 2018, which is $2550. Can I use this year’s monies to pay last years bills?
I know I have through March, 2018 to file claims for last year, but can I use money I will be putting in this year to pay for them? I’ll be calling my FSA provider this week to get the answer for sure, but maybe someone else is dealing with this as well?
The Plan
Once I get the answer to that, I will make a decision about dealing with these medical bills. I know I can call and get a payment plan with no fees or interest, but frankly, I want to cut back my monthly obligations. I’m hoping I can use this year’s FSA money to pay the approx. $1500 in bills and be done with it.
Dealing with the medical bills is Plan #3 for now. I’ve got a couple of other things going on that I will bring up over the next couple of weeks.
Hope is a creative, solutions-focused business manager helping clients grow their business and work more efficiently by leveraging expertise in project management, digital marketing, & tech solutions. She’s recently become an empty nester as her 5 foster/adoptive kids have spread their wings. She lives with her 5 dogs in a small town in NE Georgia and prefers the mountains to the beaches any day. She struggles with the travel bug and is doing her best to help each of her kids as their finish schooling and become independent (but it’s hard!) She has run her own consulting company for almost twenty years! Hope began sharing her journey with the BAD community in the Spring of 2015 and feels like she has finally in a place to really focus on making wise financial decisions.
Unfortunately, you can not use your 2018 FSA to cover expenses that were incurred in 2017, regardless of what year you pay them in. But, do you possibly have any regular monthly medical expenses, such as medications or supplies, that you budget for and don’t submit to your FSA? If so, you could submit those expenses to get the reimbursement and then apply that to those bills when you get the reimbursement. Otherwise, it is probably in your best interest to get on a payment plan with the provider to make sure they don’t get turned over to collections and show up on your credit.
Taira,
That’s what I figured, but a girl can hope…at least for a few minutes.
You are absolutely right, I do not want these to go into arrears, especially since I’m just digging out of other medical collection accounts.
I will have to see if I have any other purchases I could reimbursed for, for last year.
Thanks for your feedback!
The short answer is no, you can’t use the new years money for last years expenses. Longer answer: FSA gives you till March to submit for last years expenses in case billing takes awhile for end of year expenses.
That said, many medical offices or hospitals will offer a discount if you pay all remaining balances up front in cash, or can offer you a payment plan hopefully with 0% interest.
I guess I need to start making phone calls, and get payment plans set up!
If you’ve put FSA money into your account with your current employer and are going to be leaving the company, make sure you know what your options are in regards to that money. Do you have to spend it/empty your account before you leave the company or is there a grace period where you can submit medical bills after you’ve left the company?
Good point! We are using it now for new glasses and eye exams.
Like others said, no you can’t. We had a similar situation with my husband having unexpected surgery right after Thanksgiving. Hospitals will work with you, many offer no interest or low interest payment plans.
Have you had any luck clarifying overtime with your employer?
Don’t get me started on that! I am salaried so overtime is not an option.
Have you looked into doing the HSA versus FSA? I like the HSA because the money is there, and you can use it anytime in the future to cover bills. It does not expire(use it or lose it).
I haven’t. The FSA is offered through my W2 job so has just made sense since I started here.
Your emergency fund is a great place to get the medical funds. You can reimburse yourself at your own pace versus having a mandatory monthly payment. $1500 won’t deplete it too much.
I’ve thought about that, but wasn’t sure it was worth it since I can pay them back via payment plan with no fees/interest. But definitely something to consider.
I think I’d set up the payment plans and hold onto your emergency fund cash. You’ll always have the option of just paying off the balance once the dust settles on your job situation.
As others have said, I would not waste any time finding out what happens with the FSA money. When I left my job this past September, I had 3 months to submit a claim for reimbursement for the money in my account, for expenses incurred in 2017 until my leaving date.