Editor’s note: Discovering whether an FSA is worth it for you is the vital first step to taking advantage of their tax and cost savings. Because of that, we’ve written a new blog post: “Is an FSA Worth it? Benefits of a Flexible Spending Account.”
You might know what an FSA (Flexible Spending Account) is, if not, here is an in-depth overview. Here is how an FSA benefits your healthcare plan and predicted health expenses.
An FSA is a great way to subsidize your yearly health savings to pay for expected healthcare related expenses including deductibles, co-pays, and other out-of-pocket health expenses.
- Save Money! FSAs allow you to pay for healthcare expenses (see all qualified expenses here) through tax-free payroll contributions. Which means you are saving 25%* off the retail cost. It’s a great fiscal incentive to ensure you are minimizing your healthcare costs even as premiums costs increase.
- Swipe it! Most FSA providers send you an FSA Debit Card to use for approved purchases. What could be easier than swiping that FSA Debit Card at your doctor’s office or your local pharmacy? The money is there to use for health expenses, keep it in your wallet and never forget it.
- Smile! Why not use that FSA money to keep your smile looking its best? Did you know things like dental care, massages and yoga are qualified FSA expenses (if prescribed by a doctor). Use your FSA to pay for health-related expenses that keep you happy and healthy.
FSA benefits are highlighted by the tax savings and convenience it provides for your health related expenses. But, be sure to understand how it works. FSAs are limited to use within your plan year with their Use It or Lose It requirement (with two exceptions). Be realistic with your contributions so you can save money but not forfeit dollars at year-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.