Flexible Spending Accounts

[ARCHIVED THREAD] - Flexible Spending Accounts

Posted: 10/30/2006 8:30:15 AM EDT

My was was informed on Friday that her company was going to provide access to these now. I was not sure what all was allowed but it turns out that it can be used for all medical, dental, optical and prescription expenses. I can't see a downside to this, am I missing something. I need to read up on it and figure out how much we need to put into it and how much we actually can.

Any suggestions or advice?

Posted: 10/30/2006 8:33:20 AM EDT

[#1]

The only trick with FSAs is that you need to try and accurately predict how much you'll spend on that stuff. If you don't use it all, you lose the rest. Other than that there's no real disadvantage, it's tax-free money (if you were going to spend money anyways on those things).

Also, the way it works is that they give you the annual amount up front in the account and you pay it back over the course of the year through payroll deductions. In the event you should terminate employment, you do not have to repay the remaining balance back (free money there) so go spend it all.

Posted: 10/30/2006 8:35:20 AM EDT

[#2]

What dolanp said. Just don't overestimate the amount you'll spend. If it's not spent, it's gone. My workplace gives us a 90-day extension (Jan-Mar). 2007 is the first time I might have over-estimated.

Some FSA also have a provision for dependent care.

Posted: 10/30/2006 8:36:04 AM EDT

[#3]

Quoted:

The only trick with FSAs is that you need to try and accurately predict how much you'll spend on that stuff. If you don't use it all, you lose the rest.

BIG +1

Do it, but make sure you use it.

Posted: 10/30/2006 8:44:39 AM EDT

[#4]

Quoted:

Quoted:

The only trick with FSAs is that you need to try and accurately predict how much you'll spend on that stuff. If you don't use it all, you lose the rest.

BIG +1

Do it, but make sure you use it.

Couldn't you just buy a bunch of OTC drugs at the end of the year.

Posted: 10/30/2006 8:48:14 AM EDT

[#5]

I think I may need glasses and I know my wife needs new ones. I just paid $600 out of pocket for dental work this summer and between the two of us I think there is more that we will be needing so I think I may try to get caught up on a bunch of stuff when this goes through.

The wife has monthly prescription expenses as well as other doctor stuff so that will give us a baseline but how much should be figured in as a contingency?

Posted: 10/30/2006 8:50:24 AM EDT

[#6]

I got insurance this year and put $250 on the card.

Still got some money left on the card, doctirs sent me to some stuff that wasnt covered by insurance and didnt get anything done.

I used it for copays and stuff. Going to burn pu the rest on OTC stuff. Dropping the insurance anc Flexpay card next year.

Posted: 10/30/2006 8:53:29 AM EDT

[#7]

Flexible spending programs are awesome. Since they are pretaxed, you can't go wrong. I like to save receipts and let them add up, then submit them at once for a nice extra check. Was great when my kids were younger and needed braces too.

Lois

Posted: 10/30/2006 8:56:37 AM EDT

[#8]

Its a bigger deal if you have a family. In my case, I can easily spend over $1k/year just meeting deductibles. If there is an elective medical procedure that you know if coming in the next year, using this method has a lot going for it. Built in payment plan - without interest. If you tax affect it using your "effective" tax rate (about 10-12% for most families) then the savings add up.

Like others have said though, be SURE to not plan on deducting more than what you will spend. You can't change it after the first of the year and what isn't spent, you lose.

Posted: 10/30/2006 9:13:03 AM EDT

[#9]

I miss the FSA program we had at my former employer.

Posted: 10/30/2006 10:01:26 AM EDT

[#10]

They are genuine good deals. Estimating the amount? include deductibles you know you will meet, your co-pays, prescriptions etc. Some companies are good about OTC items, others get a little to a lot picky about things, you probably need more detailed receipts or bills rather than just cash register receipts.

I've had them for over 20 years now and never lost money.

Posted: 10/30/2006 10:05:21 AM EDT

[#11]

Are FSA's pre-tax for all taxes like Socialist security or just fed and state income tax.

Posted: 10/30/2006 10:14:42 AM EDT

[#12]

Its a pretty darn good deal. I'm putting in 3k this year. Lat year, I had a brand new family, wife and child all in the same year (

), so it was difficult to estimate all the expenses. I just did deductibles and a few hundered more. Well now I know my wife spends 1 - 2hundred a month on perscriptions and my kid is often sick

. Now, 3K, is my new conservative estimate.

When I sign up, they give an estimate of how much money it saves. Last year when I put in 1k, they said I saved 200 bucks. Nice. Thats a case of ammo.

Posted: 10/30/2006 10:15:20 AM EDT

[#13]

Quoted:

Quoted:

The only trick with FSAs is that you need to try and accurately predict how much you'll spend on that stuff. If you don't use it all, you lose the rest.

BIG +1

Do it, but make sure you use it.

Couldn't you just buy a bunch of OTC drugs at the end of the year.

yep.

[ARCHIVED THREAD] - Flexible Spending Accounts

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