How to optimize your FSA account for diabetes management

Living with diabetes involves a lot of planning and management, from monitoring blood sugar levels to ensuring you have the necessary supplies on hand. One way to ease the financial burden is by optimizing your Flexible Spending Account (FSA). Here’s how you can make the most out of your FSA to manage diabetes effectively.

Understanding your FSA

A Flexible Spending Account (FSA) is a special account you put money into that you can use to pay for certain out-of-pocket healthcare costs. The money you contribute to an FSA is not subject to taxes, which means you save an amount equal to the taxes you would have paid on the money you set aside.

Eligible expenses for diabetes management

To optimize your FSA, you should know what expenses are eligible. Here are some common diabetes-related expenses that you can pay for with your FSA. 

1. Blood glucose monitors and test strips are essential for daily diabetes management and are typically covered.
2. Insulin and insulin pumps are covered. If you are planning to upgrade your automated insulin delivery system, be sure to use your FSA account!
3. Continuous glucose monitors (CGMs) are recurring costs for which you can expect to leverage your tax-free funds.
4. Prescription medications prescribed by your doctor for diabetes management are eligible.
5. Other diabetes supplies such as items like syringes, lancets, and alcohol swabs are covered!
6. Doctor visits and lab tests, including regular check-ups and necessary lab tests to monitor your condition, are usually covered.

For an accurate list of items, check the terms of your FSA account.
 

Planning your contributions

To make the most of your FSA, you need to plan your contributions carefully. First, you should estimate your annual expenses. Look at your past year’s expenses to get an idea of how much you typically spend on diabetes management. Include costs for supplies, medications, and doctor visits.

Next, you’ll want to think ahead and consider upcoming changes. If you anticipate any changes in your treatment plan or if you’re planning to try new technologies like a CGM, factor these into your estimate.

Lastly, you should plan how to maximize your contributions according to yearly limits. The IRS sets a limit on how much you can contribute to an FSA each year. For tax year 2025, the dollar limitation for employee salary reductions for contributions is $3,300. Try to contribute the maximum amount if your estimated expenses are close to or exceed this limit. Check the IRS website each year for the latest limits.
 

Using your FSA funds wisely

Once you’ve contributed to your FSA, it’s important to use your funds wisely — and to actually use them! FSA funds typically follow a “use it or lose it” rule, meaning you need to spend the money within the plan year. Some plans offer a grace period or allow you to carry over a small amount to the next year, so be sure to check your plan’s rules and keep track of deadlines.

Always save your receipts and any documentation for eligible expenses. This will make it easier to submit claims and get reimbursed.
 
If you have funds left over towards the end of the year, plan to stock up on supplies or schedule doctor visits to ensure you use all of your FSA money. Again, don’t let it go to waste!
 

Additional tips

Some FSAs offer an online store where you can purchase eligible items directly, making it easier to use your funds. 
If you’re unsure about what’s covered or how to manage your FSA, your HR department can be a valuable resource.

By understanding your FSA and planning your contributions and expenses, you can help reduce the financial burden of managing diabetes. Remember, every little bit helps, and optimizing your FSA is a smart way to ensure you have the resources you need to stay healthy.