First time I have a FSA option

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cachemoney
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Joined: Fri Jul 08, 2016 9:57 am

First time I have a FSA option

Post by cachemoney » Wed Jan 11, 2017 10:04 am

So my company just sent out an email that we can contribute to a Flexible Spending Account for Healthcare & Dependent Care. Signups are due in 3 days.

I'm thinking of the healthcare, but do not have any dependents. I do not really spend much on healthcare, so I don't want to put money into the plan that I could potentially lose. Currently I am 35 and single. Short of regular checkups for health/dental I don't see myself using more than $500 for 2017. I am thinking I should just do the min of $500, that way I can carry over anything I don't use.

FSA Healthcare:
    Save an average of 30% on eligible healthcare expenses
    Carry over up to $500 from one plan year to the next—there’s virtually no risk of losing your hard-earned money
    Access the full amount of your account on day one of your plan year

b42
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Re: First time I have a FSA option

Post by b42 » Wed Jan 11, 2017 10:11 am

Flexible Spending Accounts are a great way to save on taxes if you have known or planned healthcare expenses. The $500 carryover feature is useful as well.

Does your employer contribute anything to the plan for you?

I would figure out what you plan to spend in 2017 for care, and add that in over the $500. If you end up having more money than what can be rolled over at the end of the year, I would look at the plan documents provided for the FSA and know what is able to be reimbursed. In my case a few years ago I had additional funds, so I got a pair of prescription sunglasses that helped me blow through the remaining money in the account (since I couldn't roll over anything).

flyingbison
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Re: First time I have a FSA option

Post by flyingbison » Wed Jan 11, 2017 10:15 am

Find out what the reimbursement process is like with your FSA. Ours has become so ridiculous that I decided not to bother with it this year.

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Watty
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Re: First time I have a FSA option

Post by Watty » Wed Jan 11, 2017 10:38 am

Even if you do not need eyeglasses it is still good to have an annual eye exam every year or two since that can catch a lot of potential problems early. If you don't already have a vision plan that covers that then I would budget for that out of your FSA account.

You can google lists of what is FSA eligible and there are a lot of over the counter things cold medicines, bandages,sunscreen, etc. If you have any money left over in December you can just stock up on those.

I think you would be pretty safe in adding a bit more for things like that.

flyingbison
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Re: First time I have a FSA option

Post by flyingbison » Wed Jan 11, 2017 10:44 am

Watty wrote:
You can google lists of what is FSA eligible and there are a lot of over the counter things cold medicines, bandages,sunscreen, etc. If you have any money left over in December you can just stock up on those.



OTC medicines can be reimbursed, but only if they are prescribed for you by a doctor (even if they can be obtained without a prescription).

cachemoney
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Re: First time I have a FSA option

Post by cachemoney » Wed Jan 11, 2017 10:50 am

Thanks for all of the replies, gives me some areas to look into. Unfortunately my employer does not contribute anything to it.

BTW the company is WageWorks. Anyone have any experience with them?

flyingbison
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Re: First time I have a FSA option

Post by flyingbison » Wed Jan 11, 2017 10:58 am

cachemoney wrote:Thanks for all of the replies, gives me some areas to look into. Unfortunately my employer does not contribute anything to it.

BTW the company is WageWorks. Anyone have any experience with them?


We used to use Wage Works several years ago, and they seemed OK. Just as with healthcare, 401k, etc., your experience is going to depend on a combination of the third party vendor and your employer's own policies.

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Watty
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Re: First time I have a FSA option

Post by Watty » Wed Jan 11, 2017 11:57 am

flyingbison wrote:
Watty wrote:
You can google lists of what is FSA eligible and there are a lot of over the counter things cold medicines, bandages,sunscreen, etc. If you have any money left over in December you can just stock up on those.



OTC medicines can be reimbursed, but only if they are prescribed for you by a doctor (even if they can be obtained without a prescription).


Good catch, I forgot that changed.

When you look at the list there are still a lot of the other things that you can stock up on if you are have a bit of money left at the end of the year.

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MilleniumBuc
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Re: First time I have a FSA option

Post by MilleniumBuc » Wed Jan 11, 2017 12:16 pm

cachemoney wrote:Thanks for all of the replies, gives me some areas to look into. Unfortunately my employer does not contribute anything to it.

BTW the company is WageWorks. Anyone have any experience with them?

The Feds just switched to wage works in September. So far, they are better than the last one, with reimbursement being automatic tied to medical/dental EOB. Turnaround about 4 days from when EOB is published.

cachemoney
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Re: First time I have a FSA option

Post by cachemoney » Wed Jan 11, 2017 12:42 pm

So basically if I choose $1,000, over the next 20 pay periods I am deducted $50. But I can go right away to doctor's office and pay a bill of $500 and get reimbursed from the FSA?

flyingbison
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Re: First time I have a FSA option

Post by flyingbison » Wed Jan 11, 2017 12:46 pm

cachemoney wrote:So basically if I choose $1,000, over the next 20 pay periods I am deducted $50. But I can go right away to doctor's office and pay a bill of $500 and get reimbursed from the FSA?


Correct

Ron Ronnerson
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Re: First time I have a FSA option

Post by Ron Ronnerson » Wed Jan 11, 2017 12:55 pm

You can use it for a variety of things such as sunblock, bandages, blood pressure monitor, contact lenses and solution, eye exams, glasses, co-pays to doctors and dentists, prescriptions, and much more.

Also, depending on your taxes, it could save you a decent amount. In our case, it saves 25% on federal taxes, 8% on state taxes, 5% on the child tax credit since we're in the phaseout range, and 1.45% for medicare (I don't pay into social security). So it adds up to almost a 40% savings and would be close to 46% if my wife's employer offered an FSA since she does pay into social security.

Its definitely worth taking advantage of if you'll have eligible expenses.

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Watty
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Re: First time I have a FSA option

Post by Watty » Wed Jan 11, 2017 1:18 pm

flyingbison wrote:
cachemoney wrote:So basically if I choose $1,000, over the next 20 pay periods I am deducted $50. But I can go right away to doctor's office and pay a bill of $500 and get reimbursed from the FSA?


Correct


+1

and if you leave the job the next week you never need to pay that back the extra. That is the flip side of the "use it or lose it" rule.

I retired in the middle of the summer summer and had completely used that years FSA amount but only made about six months contributions so I came out over a thousand dollars ahead.

The HR people may not mention that part since some people will abuse it by doing things like having a lot of dental work or laser eye surgery in January when they know they will be leaving the job in February.

My understanding is that it works this way because you are technically buying insurance for $500, or whatever amount you elect, even though it looks like you are building up a cash balance account.

I'm not sure what the current rules are but if you contribute more than you use and then leave the job in November you may not not be able to use the rest of your balance in December so be sure to research that if you are likely to change jobs.

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