With the current hard economic times, people will do anything to save on taxes, and this is why a lot of people have turned to the flexible spending account (FSA) for saving. People with a huge deductible health plan that has a medical savings account can only be provided with a limited purpose FSA.
Money in a FSA should be spent within the plan year, and before an additional grace period of two and a half months. Failure to spend the money within this period leads to loss of the money.
Health Reimbursement Arrangement (HRA) is an employer-funded plan that reimburses employees for incurred medical expenses that are not covered by the standard company insurance plan. You may browse the internet to find more details on FSA / HRA claims.
Some employees have found an unconventional, but eligible, way of ensuring that they clear their FSA by plan end. The employees spend the balance by logging miles. FSA providers allow account holders to log miles for trips to medical centers, or even trips to Wal-Mart, or CVS, to buy items that are FSA eligible.
Reimbursements made for such trips depend on the rates set by the internal revenue service (IRS). To get reimbursements for such trips, an account holder must present a doctor's bill or a receipt from a drug store and prove the stated mileage through, for example, calculation of distance from one's home to the place of service by use of Google Maps. Individuals that are worried about losing their FSA balances should consider logging their miles so as to run down the balance.