Although most of the health-care-reform law's changes won't take effect until 2014, new rules that start on January 1 expand who is eligible for health-insurance coverage, restrict which costs qualify for flexible spending account reimbursement, and open the door to free preventive care.
Enlist your doctor's help. Starting in 2011, you can no longer use pretax money from an employer's FSA to pay for over-the-counter drugs (except insulin). But these medications still qualify for reimbursement from your FSA if you submit a prescription with your receipt. Ask your doctor to write a prescription for the over-the-counter drugs that you use frequently. Items such as hearing-aid batteries, diabetes supplies and contact-lens solutions are still eligible and do not require a prescription.
Use FSA money for grown kids. Many employers will allow you to use FSA funds to pay for out-of-pocket medical expenses (except health-insurance premiums) for a grown child up to age 27, even if he or she is no longer your dependent. Ask your employer about your FSA's rules.
Plan ahead for elective procedures. Some employers currently allow employees to contribute up to $5,000 each year in pretax money to their FSAs. But that limit will shrink to $2,500 in 2013. Consider scheduling costly elective medical procedures that aren't covered by insurance (such as laser eye surgery and major dental work) in early 2012 so that you can double up your available FSA funds.
Assuming your employer gives you a grace period until March 15 to use or lose FSA funds from the previous year, you would be able to use any money left over from 2011 plus your full FSA allocation for 2012 to cover medical expenses incurred during the first two and a half months of 2012. (You can use the same strategy to combine leftover 2010 FSA funds with 2011 set-asides for medical expenses incurred by March 15, 2011.)
Schedule free preventive care. Many insurance plans must now provide certain preventive-care screenings without charging deductibles or co-payments. This rule may apply to blood-pressure, diabetes and cholesterol tests, mammograms and colonoscopies, flu shots, routine vaccines, and well-baby and well-child visits. Go to www.healthcare.gov for details.
Medicare beneficiaries also get an expanded roster of free preventive benefits, including an annual wellness visit and personalized prevention plan. Medicare will no longer charge co-pays or deductibles for mammograms, prostate-cancer screenings and colonoscopies (go to the Manage Your Health section of Medicare.gov for details).