Healthcare is an expensive necessity. For some, healthcare costs range in the thousands of dollars on an annual basis.
If you do not have access to a Health Savings Account (HSA), but your employer offers a Flexible Spending Account (FSA) option, you may want to consider using pretax dollars to help offset your medical expenses.
A Few Reasons to Consider Getting an FSA
Does your employer offer a Flexible Spending Account option?
Flexible Spending Accounts are only offered by employers. This type of account is not available if you are self-employed.
Many employers offer this benefit, but you may have to dig a little deeper to make sure it is an FSA. For example, there are Health Savings Accounts (HSA) and Health Reimbursement Arrangements (HRA) which sound similar but have different rules and regulations.
Be sure to study your benefit options or talk to your HR department to make sure you have the best information and take advantage of the benefits that make the most sense for you.
Do you, your spouse or dependents have future medical expenses to set money aside for?
To get the most bang for your buck, you’ll want to sit down and think about what health care expenses you, your spouse and dependents may have in the next year.
Does anyone have upcoming dental work they need? For dental work, the basic rule is that anything that treats or prevents dental disease is eligible to be covered by your FSA.
Here are a few dental services that are typically covered.
- Preventative services
- Teeth cleanings
- Teeth extractions
How about your family’s vision needs? Many services are eligible for payment with your FSA, for example:
- Routine eye exams
- Prescription eyeglasses
- Prescription sunglasses
- Contact lenses
Is anyone in your family living with a chronic disease with predictable expenditures month to month? You can use your FSA funds to pay for supplies and medications related to many chronic conditions.
It will take some time to plan possible medical expenses for the upcoming year. You may find that using pretax dollars to pay for dental cleanings, eyeglasses, and prescriptions you’d pay for anyway is a welcome savings to your budget.
Are you willing to spend the contributions, so you don’t lose your money?
Flexible Spending Accounts are a “use it or lose it” option. Employers can offer a grace period (up to mid-March of the following year) or up to a $500 carryover option, but it is not required.
Knowing this, you’ll want to consider ways to “spend” your money to ensure you don’t lose it.
Many products and services are covered under an FSA. Fortunately, there are several ways to use your FSA funds online. For example, The FSA Store and Walgreens, as well as other retailers offer many products available to purchase using your FSA account. So, if the end of the year is coming up and you need to spend the rest of your money, an online shopping spree may be in your future!
You may also consider scheduling that filling you’ve been putting off or purchasing an extra set of eyeglasses for your 10-year-old. Just be sure to use the money!
Healthcare expenses are a reality for everyone. Take some time to consider your upcoming medical expenditures and decide if utilizing an FSA makes sense for you.
If you need more help with health account decisions, check out our blog. We will make you a healthcare benefits expert in no time, without any extra work or effort on your end.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.