A couple sits together at the kitchen table and looks worried. The woman is holding up a late bill.

When Your Bill Arrives Too Late for Your FSA or HSA

Do you have a Health Savings Account (HSA) or Flexible Spending Account (FSA), that you use to pay for your out-of-pocket medical expenses? If you do, it is important to know what to do if a medical bill arrives too late to get reimbursed.

What is an FSA?

A Flexible Spending Account (FSA) is similar to a personal savings account, but the money in the account is used to pay for medical expenses. You can only get a FSAs through your employer. If your employer offers a FSA, then employees are able to set aside a portion of their salary to put into the FSA, and the money put into your FSA is not taxed.

You can use the money in the FSA to pay for co-pays, deductibles, some drugs, and other health care costs. Generally, you pay for the medical cost and then get reimbursed from the FSA, by sending them your bills or receipts. Some FSAs will give you a debit card that you can use to pay for your expenses.

What is an HSA?

A Health Saving Account (HSA) is similar to personal savings accounts, but the money in the account can be used to pay for medical expenses. You can only get an HSA, if you have a high-deductible health insurance plan and are under the age of 65. You can start your own HSA through a financial institution (e.g., a bank), or your employer may offer an HSA. The money deposited into the account is not taxed if used for medical expenses. Unlike an FSA, the funds roll over and accumulate year to year if they are not spent.

For more information on FSAs and HSAs, see our Quick Guide to High Deductible Health Plans, HSAs, & FSAs.

What is a run-out period?

A FSA “run-out period” refers to the period of time when account holders can send in their claims for expenses from the previous plan year.

This period of time is chosen by the employer. It is important to check to see if your employer’s FSA plan has a “run-out” period. Typically, this “run-out” period is 90 days, but can last for any period of time.

For example, if your plan ends December 31, and you have a run-out period of 3 months, you have until March 31 to send in the expenses that you incurred before December 31.

In order to take advantage of the FSA “run-out” period, it can be helpful to keep track of your receipts and bills that include the patient’s name, provider’s name, date of service, type of service, and cost. Triage Cancer’s Medical Bill Tracker worksheet may be helpful.

What is a grace period?

You generally must use the money in your FSA within the plan year. But your employer may offer one of two options (neither are required):

  • A grace period of up to 2.5 extra months to use the money in your FSA (even though your plan year has ended)
  • Allowing you to carry over up to $610 to use in the following year

For example, if your plan ends December 31, and you have a grace period of 2.5 months, you have until March 15 to incur medical expenses.

Can you get more time to submit your bills?

The Consolidated Appropriation Act of 2021 allowed employers to extend a 12-month grace period, to spend unused FSA funds for plan years ending in 2020 or 2021.

While it is important to submit reimbursement requests on a regular basis, this is not always possible. For example, if you get a medical bill after the reimbursement window has closed.

It is important to check with your employer to see if you can request a reimbursement during the run-out period or the grace period.

What if you haven’t received a bill yet from your provider?

If you have received medical care and haven’t received a bill yet from your provider for that care, you can contact your provider to see if they can expedite the bill, so that you can submit it to your FSA for reimbursement.

But, if you receive a bill from a provider that you weren’t expecting and it is after the run-out period or the grace period. Your reimbursement request may be denied. You may consider filing an appeal. If it turns out that you are unable to get reimbursement for the bill, you may be able to negotiate with the provider to lower their costs.

What if you receive a surprise bill?

If you receive medical care and believe that all of your bills have been paid, but then receive a surprise bill from a provider who turns out to be out-of-network for your health insurance plan, then you can submit that claim to the No Surprises Help Desk.

What about late fees from your provider?

If you have a medical bill that you are paying late, and the provider is charging you a late fee, those fees are not eligible for reimbursement using FSAs and HSAs.

Are there similar deadlines for HSAs?

If you have an HSA, there is no “use it or lose it” rule. The reimbursement can be done at any time. But it is important to note that reimbursements can only be made for expenses that were incurred after your HSA was created.

For more information about navigating health insurance and medical bills, visit TriageCancer.org/HealthInsurance.

About Triage Cancer

Triage Cancer is a national, nonprofit providing free education to people diagnosed with cancer, caregivers, and health care professionals on cancer-related legal and practical issues. Through eventsmaterials, and resources, Triage Cancer is dedicated to helping people move beyond diagnosis.

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