Skip to comments.Top 5 Reasons You Need to Use Your Health Care Flexible Spending Account (surviving socialism)
Posted on 11/10/2008 6:16:43 PM PST by RKBA Democrat
Many companies these days offer what are commonly called either health care or dependent care flexible spending accounts (FSA). Surprisingly, very few employees take advantage of this fantastic benefit. According to a survey published by the International Foundation of Employee Benefit Plans in 2008, less than 40% of eligible employees who had the option available to them used a health care FSA, and less than 10% of eligible employees utilized a dependent care FSA if it was available.
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I have been doing it for three years now, and I highly recommend it. It’s about the closest we can get to a true tax break for medical expenses.
Always, always, always take your income pre-tax....whenever possible!
If the money rolled over into the next year, it might be a good idea. You forfeit whatever money (your own money) you have left in it at the end of the year. At least thats the case with my company’s plan.
They just turn around and screwjay us with the Alternative Minimum. But we do it as a sort of insurance so that we don’t have to dip in to ready cash to cover our $7500 deductible if we have a big medical event.
We’ve used one for years...as soon as it became available. I do the record-keeping, etc. That’s one reason most don’t want to be bothered, I suppose....
Are you sure? Ours changed a year or 2 ago...the rules relaxed. If it hasn’t changed, then of course, you have to be careful making the election amount, but it’s still worth it.
Congress refuses to amend the law to permit FSA funds to be carried over into the following year. The concern seems to be that people might eventually have enough money saved that --gasp-- they won't need health insurance. We can't have people just paying for their own medical expenses out of pocket. /sarc
I have it too, and I find it very useful. I am wondering how long it is going to be legal to have it.
We’ve used these accounts for years. They’ve gotten easier to use, with most of our co-pays being submitted electronically by the care provider for FSA reimbursement. With two sons in orthodontic treatment, this has been a great help. Their expenses are only partly covered by dental insurance, and the payment schedule is known well in advance.
Our FSA (Flex plan) allows you to carry over into April of the next year. Excellent, excellent benefit.
Maybe. I’ll look at it again in a week or so.
This is a really good deal and we’ve used ours for the births of both of our sons. We maxed out our contribution with our first son who had some medical issues due to prematurity.
I worked in HR for a few years and the problem with the flex spending account is that it’s confusing to employees. I tried to explain it as simply as I could but people would still not understand. They didn’t get the “use it or lose it”. I’m so glad I’m a stay at home mom now!
My favorite is you dont say SS payroll taxes on the money. That is rare.
It's funny, but for years with our 2 children - 1 with a chronic serious condition - we used the max amount allowable.
Then they ceased to be dependents, and we were able to cut back a little...now, getting older and with more meds, etc...we're back to the limit!
Is this used in place of traditional medical coverage, or in addition to it?
it’s in addition to it. rumor has it we’ll be able to put unused funds into our 401(k)s as well before long.
well, at least that was the case before the collective sh*t america took last week.
I think what they're getting back to is the old style Major medical plan - utilizing HSAs.
FSA plans typically allow 15 1/2 months to expend funds before they are lost. What congress doesn’t allow is for you to continue to build up those funds in perpetuity. There doesn’t seem to be any good reason for them not to allow this, except that they don’t want people to have a large sum built up to use for a rainy day. People taking care of themselves is anathema to the statists.
The real secret to FSA’s is child care. $5k a year for child care, tax free.
A shocking number of employees do not take advantage of these plans.
Lasik is big deal with this stuff on the medical side, as are lots of other optional, non-insured medical procedures.
That was the case for me - the record keeping (and confusing demands, rules, and regulations) kept me from coming back for a second year.
Does all this apply if you buy your health insurance on your own?
I think we lose unspent monies as well, which is why I try to figure out what I’m going to spend and keep my contribution just a little under that. I’m on medications that I refill once a month, so I’m about 90% sure of what I’ll spend from year to year on co-pays. Anything extra, we’re allowed to spend on over the counter meds, etc., so it works out.
“Does all this apply if you buy your health insurance on your own?”
Yes, if your employer offers an FSA. It’s a win/win for the employer as the FSA deductions are taken before social security taxes are taken out of your pay. So they’re saving 7%+ on whatever you choose to contribute. Unfortunately, I don’t think your health care premiums can be applied against your account. But all your co-pays, deductibles, prescriptions, OTC drugs, etc. should be eligible. There are some different rules if you have one of those special policies with an HSA.
If you own your own business, you can go through a HR/payroll contractor to set one of these up.
(disclaimer: I’m not an accountant or HRO type. See your accountant or HRO professional if you need assistance)
Those are IRS rules and apply to everyone, but since the government steals so much of our money post-tax, I figured we only have to use half of it to break even. We can do that just with our prescription co-payments.
Reading glasses, wraps and braces for knees, elbows, etc, first aid supplies and many more things you should always have on hand are covered by FSA. It's your money and now's a good time to get ready for hard times ahead.
Unfortunately, the total is only 5K, whether you have 1 kid or 5.
The reason I went back to work full time while Husband got his business off the ground was that we needed affordable health insurance.
My company GIVES me $1,300.00 a year in a FSA, and I kick in $50 a month on top of that. Our health insurance is very affordable and very inclusive at $208.92 a month.
It’s November, and we’ve used up every dime of it, because my husband is on some expensive meds due to his two spinal fusions, and we both got glasses and contacts this year.
It really helps our budget.
And, in case anyone didn’t know, there’s quite a few over-the-counter things they’ll reimburse you for as well. If you shop at Walgreen’s, there will be a little “F” next to purchases that can be reimbursed through your FSA. Wal-Mart probably does that as well?
Sadly, I’m sure CONGRESS will eventually find a way to tax us on this and ruin one of the few perks we have left in the Free Market. *Rolleyes*
“Wal-Mart probably does that as well?”
Yes they do, but I don’t remember what the code is.
“Sadly, Im sure CONGRESS will eventually find a way to tax us on this and ruin one of the few perks we have left in the Free Market. *Rolleyes*”
I can’t say I’d be surprised if they tried. Part of the reason why it’s important to spread the word about these is to make sure that there are a whole lot of folks taking advantage of these FSA plans when they’re offered. It’s like the home mortgage interest deduction; it would be political suicide to target it because so many people take advantage of it.
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