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My flex account has a grace period until March 15. So operations done before March 15 can be submitted towards last year's (2011) flex account or this year's (2012) flex account. But what if last year's flex account doesn't have enough to reimburse the cost of a certain procedure? Can the remaining amount be reimbursed under this year's flex account?

For example, let's say I need a dental implant that costs $4000 (not covered by insurance). The procedure is performed Feb 1. Last year's 2011 flex account still has $1000. This year's flex account has $5000. Can I have $1000 reimbursed from the 2011 plan and the remaining $3000 reimbursed from the 2012 plan?

4 Answers 4

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When you submit for reimbursement, the cash you get should be FIFO (first in, first out) and a large bill should empty out 2011 first, automatically tapping 12 for remaining amount owed. I doubt you need to do anything.

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  • +1 This is how mine works. The reimbursement forms don't even have a place for me to request which pool of money.
    – MrChrister
    Commented Feb 22, 2012 at 18:27
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My answer is a combination of the the one from Aaron and Joe.

The IRS used to have a December 31st deadline for when the procedure needed to be done. They extended it a few years ago to cut down on the number of people buying glasses between Christmas and New Years. There is an even later deadline for submitting the paperwork.

Check the documents for your plan. Some will have a way for you to specify which plan year to use. They will also specify how they handle ones during this overlap period for expenses automatically submitted by a Doctor or Pharmacy, or when using the special credit card they give you.

Ask them how they address splitting it between the old and the new plan year.

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  • thx. It sounds like my plan takes care of it for me as Joe mentioned.
    – Stainsor
    Commented Feb 24, 2012 at 14:29
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It's my understanding that the grace period is only for filing - the actual procedure/purchase must be performed CY2011 to be paid out from the 2011 FSA money, etc.

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  • There was always a grace period to file. Else, any expenses occurred in late November/December would run the risk of not getting submitted in time. The recent change was the ruling permitting expenses to be incurred into the new year. Commented Feb 25, 2012 at 5:19
  • Thanks @JoeTaxpayer - I didn't know there were new rules; I tapped mine out in like September this year anyway... Commented Feb 26, 2012 at 1:02
  • Note, however, that while the IRS made it legal for plans to have a grace period for incurring expenses, plans are not required to offer one. Check your plan documentation.
    – stannius
    Commented Jan 11, 2013 at 0:41
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Your administrator will pull from last year's funds first, before automatically moving on to the new year. The procedures are under guidelines from the IRS so it should be pretty standard. You likely only have to submit the claim once, but your administrator may have a special grace period form to fill out.

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