flexible health spending accounts

[EmsMom]

or whatever they are called. I have budgeted $125 a month toward medical expenses (dr. co-pays, dentist, eye dr., some extra for emergencies). We can get into that flexible account and save some money on taxes. But there is a $43 fee for the account and it works as use it or lose it. That seems crazy!!! Who thought of that? Anyway, it seems as if putting some of what I already budget into one of those accounts would cut our taxes a bit. Has anyone any experience with these accounts?

[e(Lisa)beth]

I love my Flex account, it comes in very handy. Mine does have the use it or lose it feature but with careful planning it's not a problem. The $43 fee, though, that's new to me, and does seem steep.

[barky586]

Yes, they are fantastic. I just whip out my Medcom to pay for any medical related purchases. When estimating what your medical expenses will be for the week, always under-estimate. That way you won't lose money.

[mightymoo]

Yeah, we do this. The use it or lose it sucks, but it just means you have to budget very carefully. I use it for dental work and really its great there - like a 28% discount!

Since dental work is generally somewhat flexible, I just plan for say two crowns next year and all things like all our copays for annual physicals and a conservative estimate of other stuff and so far (this year is the first year we've done it) it has not been a problem making sure it is all spent.

We have ADP and they make me file paperwork whether I use the stupid debit card or file a claim for reimbursement so it is a bit of a pain to get your money back sometimes. Another nice thing is though, at least with ours, we contribute 1/24th of our annual flex budget to the FSA each payperiod, but we can spend all of it right away if necessary, we don't have to wait for it to accumulate.

[velochic]

I'd be leery of that fee. That doesn't sound right.

We use ours (it's free) and although we've never had any left over, I believe you usually have some time after the beginning of the year to use up the rest and it applies to even over-the-counter meds.

[mightymoo]

Originally Posted by velochic

I'd be leery of that fee. That doesn't sound right.

Yeah, I forgot to mention, we don't pay a fee.

[Eman'smom]

We love ours, we had several emergencies this year so now I feel like we should have contributed more but it's really wonderful. Around here with a dr's note you can even get massage covered.

But that fee does seem weird, it it priviate?

[mightymoo]

Well, the company administrating the FSA has to be paid. DH's employer pays for his as a benefit, but honestly I could see an employer offering the FSA, but making the employees pay the administration fee, I'm not sure if that's what's going on.

[rachelmarie]

We have some different but similar: a health savings account (HSA). We can use our's in the same was as an FSA, but we don't need to use it up by the end of the year.

Our's has a monthly maintenance fee of $3.25.

Now that I think about it, I think with an HSA (our's at least) you have to have a high deductible health plan. Our health plan is pretty good - $3k deductible, 100% after deductible and it pays 100% of preventive care - all for $182/month for the 3 of us. We've been really happy with our plan along with the HSA.

Anyway... maybe this will help, maybe not.

[Herausgeber]

We're really happy with ours. It even covered the hospital grade pump I had to rent when I went back to work, as a medical expense for the baby.

[Caneel]

Who is providing you the FSA? An employer? I haven't run across an employer charging their employees yet. If you are using a different provider than the fee doesn't surprise me too much.

I really miss having my FSA and my Dependent Care Account. (I changed jobs and neither is offered)

The programs are huge money savers if one can keep track of the paperwork and estimate expenses. I never had money left over and also never had to spend "foolishly" to use it all up - with a pregnancy, then a child in daycare our expenses exceeded the maximum contributions. (My mom had her teeth lightened just to use up her balance)

[Curlita]

We use ours for dependent care and health care expenses (two plans administered by the same company) and I love it. You can save a lot in taxes, as long as you have a good handle on how much you will spend during the year. We don't pay an annual fee, so that part does seem odd... it seems like it would still represent a savings, though, depending on your tax bracket and how much you put into your flexible spending account.

[Denvergirlie]

FSA

Another no fee person here, but you must use it all in a calendar year.

[annettemarie]

This is timely, as the board of pensions in offering us a chance to do an FSA next year. Now I know to check about a fee.

I have a question, and I apologize if it's silly. Who gets to decide what's "medical," me or insurance? For example, could I use it for a homebirth, which insurance doesn't cover. A naturopath?

[mightymoo]

Originally Posted by annettemarie

I have a question, and I apologize if it's silly. Who gets to decide what's "medical," me or insurance? For example, could I use it for a homebirth, which insurance doesn't cover. A naturopath?

I believe there are actually regulations about this - what is covered and isn't I don't think is decided by the FSA provider, but by the government regulations that govern FSAs. Remember, its your money, so they don't care as much what its spent on as an insurance provider would, they just are charged with making sure you aren't using the pretax money for something that isn't valid. The FSA company should be able to tell you what can be reimbursed through it. I'd imagine a homebirth would be covered in terms of say the midwife, but they might not let you deduct something that isn't "medical" like a waterproof sheet cover, kwim?

ETA: I tried a google search for homebirth and flex spending and the first result was this thread! Man, google moves FAST!

[annettemarie]

Thanks! I will see if I can look it up somewhere.

[polyhymnia]

Originally Posted by annettemarie

This is timely, as the board of pensions in offering us a chance to do an FSA next year. Now I know to check about a fee.

I have a question, and I apologize if it's silly. Who gets to decide what's "medical," me or insurance? For example, could I use it for a homebirth, which insurance doesn't cover. A naturopath?

The FSA will have a list of covered/not covered expenses. Some of what is covered is pretty "out there" so you might have some luck. For example, OTC allergy pills are covered but OTC Tylenol is not - the idea being that allergy tablets are for a specific medical thing, and Tylenol is generic. Adult diapers are covered, but feminine products are not - again, one being a "medical condition" and another being a routine part of being female. You should be able to get a list of what is and isn't covered before enrolling.

I like mine - I never put enough in though. Oh well. That fee sounds really steep though I don't have a fee with mine. I wonder if the fee would negate any savings??

[ShaggyDaddy]

Since flex plans are pre-tax, unless you pay less than 2.9% income tax, the 43 dollar fee is worth it assuming you can spend the full $1500 each year.

[mightymoo]

Originally Posted by crayolaab

I like mine - I never put enough in though. Oh well. That fee sounds really steep though I don't have a fee with mine. I wonder if the fee would negate any savings??

$1500 a year (what she said she budgets) is $1080 after tax in a 28% tax bracket. So in that sense, you get to spend $420 more than you would with the same pretax money with taxes taken out. Definitely worth it.

The lowest possible tax bracket is 10% I think. So $1500 after taxes would be $1350 after taxes, meaning you'd get $150 more spending power with the FSA for the same money. Seems like even at $43 fee, its still worthwhile.

[tamagotchi]

Originally Posted by mightymoo

I'd imagine a homebirth would be covered in terms of say the midwife, but they might not let you deduct something that isn't "medical" like a waterproof sheet cover, kwim?

Our FSA reimbursed for all the birth supplies we bought through Cascade.