That Time of Year End Again: The Perils of Flexible Spending

It’s an odd problem to have, really.

Finding yourself in a position where you absolutely positively have to spend exactly $890 before the year is over, or the government gets to keep it (which is unthinkable as you know they’re going to get enough from you in April). It’s a problem I was warned about when I first enrolled in Flexible Spending, that handy payroll program whereby you can withhold money for allowable medical expenses and healthcare, tax-free. This reduces your taxable income (and therefore slightly reduces the amount the government can take from you in April) and allows you to reimburse submitted medical expenses also tax free, on your paycheck. Sounds simple and it basically is and it worked like a charm last year. This year it’s not working well at all.

The difficulty this year is, I haven’t been as conscientious about it as I was last year. This year, rather than adhering every receipt from every prescription purchase to my refrigerator with a magnet, I’ve chosen instead to ‘file’ them in my wallet. Note: Anything filed in my wallet is guaranteed never to be seen again until the end of the current year and the closure of the grace period for submitting receipts for reimbursement. Last year, every receipt for contact solution, aspirin, band-aids, allergy medication, doctor visit co-pays and over the counter drugs went on the fridge, stayed on the fridge, and was promptly and effectively reimbursed. This year, they’ve either vanished into the veritable black hole of my wallet or been tossed away with the grocery sack because I had my mind on something else. Basically, I’ve been regularly throwing money away since January.

Not a good problem to have.

Reviewing my Flexible Spending balance today, I decided there would be no better use for my lunch hour than to drive to Midvale and buy contact lenses, as many as my eye care provider would let me have. This amounted to eight boxes, an entire year’s supply, and came to a grand total of $205.15. A thorough search of my wallet uncovered receipts for Christmas gifts in 2006, 3 business cards of people I can’t recall, a post it note with “I love you” scrawled on it someone once tucked inside a lunch they’d packed me (that, I kept) 1 book of matches from a restaurant I’m quite sure I never visited, and one receipt from my eye appointment in September, along with the receipt for the purchase of a Three Year Eye Care Plan, which added another $115.40. This claim completed and dropped into the outgoing mail, I calculate what I now have to spend is a grand total of $569.45.

I’m not (knock on wood) due for another physical until the spring, and even if I remembered to submit claims for the one remaining month of prescriptions I have to fill this year, I’m only down to $519.45. To save this amount from the evil clutches of the IRS (they can wait until April, they’re not getting a dime any sooner), I would need to buy…well, eight pairs of glasses, because America’s Best prices are so good you can get two pairs for only $69.

There are a few reasons I don’t harbor any desire to have eight pairs of glasses. Number one, I don’t wear glasses that often. Number two, glasses pique Basil’s gastronomic interests more than, say, fresh bacon. She actually salivates over them. We’ve been lucky enough with the three pairs she’s ingested over the past five years. I’m not going to put the temptation of eight optical appetizers in her path. I might go four pairs, and then lock them up somewhere out of her reach. That would reduce the amount I had to go through to about $381.45.

The only option, at that point, is to purchase yet another year’s worth of contact lenses (it’s highly recommended you replace your contact lenses with a new pair every three weeks. I’m thinking if that’s a good idea, replacing them every three days should be even better) and just to mix it up a bit, I’ll make them the colored contact lenses. I used to wear those, in a gray/green shade that actually wasn’t much different from my own, just made them a little more green. It was subtle, and slight. It would reduce my spendable balance down to about $176.30. I’m thinking I could knock that out by asking one of the girls in the office with a Costco card to pick me up 15 of those $12 bottles of contact solution on their next shopping venture. It’s recommended you soak your lenses in fresh solution at least once a day. I’m thinking if this is a good idea, an even better one would be to soak them in fresh solution every three hours or so.

This accomplished, I will successfully have thwarted the efforts of the IRS to take back tax-free money that I frankly don’t want them to have. I have roughly two months to get this done, and have already slated all purchases into my Blackberry so it can faithfully send me reminders and keep me on the straight and narrow with this.

“Are you going to sign up for Flex again for 2010?” Diane asked yesterday. “It’s only open enrollment until the 30th.”

“I am,” I said. “Same as this year.”

She looked at me like I was nuts, which is not an unusual experience for either of us. “Are you joking? Weren’t you really short this year?”

I was, I admitted. Very short. For several reasons, all beyond my control. Number one, I stopped going to my eye doctor and stopped buying my glasses from her, came to my economic senses and started using America’s Best, thus reducing my cost per pair of glasses in excess of $325 and the cost of my eye appointments, at least for the next three years due to my purchase of the Eye Care Plan, by 100%. I also was the victim of an allergy medication that, without consulting me or the effect it would have on my Flexible Spending budget, the FDA chose to make over the counter, thereby eliminating that reimbursement. Basil fell down on her commitment to the program’s success and did not ingest or mangle so much as one pair of glasses this year, setting me back a good $600 (assuming, as I had at the time I signed up, I’d still be buying them from my old eye doctor), and I’d had no medical expenses that were by any means uncovered by my insurance or reasonably unforeseen. “I’m going in with the same deduction,” I told her then. “Just to be on the safe side.”

Call me superstitious, but I feel if I reduce it, I’ll be tempting fate and at the end of next year, I’ll have more expenses and not enough to reimburse them. The worst thing that can happen if I hold to plan and repeat last year’s deduction is I’ll have a surplus of contact solution and change my contacts every forty-five minutes.

It’s what we around here call a crap shoot, but I’m going to shoot it. At least until the government evolves what we really need: A Flexible Spending Plan for hair appointments, nail appointments, make-up, hairspray, Oprah Magazine, over-priced perfume and the purchase of nylons and stockings. Nobody would fall short on that kind of plan, and we’d all have so much ‘pre-tax’ earnings, the IRS would be writing a reimbursement to us.