If you're anything like me, you probably got an unwanted Christmas present: a cold.
You put money into this workplace benefit before taxes are taken out of your check. Then you use the untaxed medical account funds to pay for treatments that aren't covered by your health insurance, such as copays and over-the-counter, or OTC, medications.
And now is the time to stock up on OTC treatments. 2010 is the last year that FSA money can be used, or at least used easily, to cover medications you buy off your grocery or neighborhood drugstore shelves.
Starting Jan. 1, 2011, you can still be reimbursed from your FSA for such purchases, but only if you get a doctor's prescription for the store-bought treatment. Yep, if your physician says all you need is some of that icky green cold syrup, ask him or her for an Rx for it so you can use your FSA funds to pay for it.
In most cases, that's not going to happen -- and that was the underlying point of the change. If you can't spend FSA funds so liberally, then you won't put as much in the account. And less nontaxed money in these accounts means more taxable money for Uncle Sam.
But there are still a few days to take advantage of the current more liberal OTC FSA rule. So if your workplace benefits year runs through Dec. 31, pick up some OTC medications this week courtesy of the tax code.