Someone please explain flex spending healthcare to me

kittycarr

It is one of four very good policies with DH's new job. 

stacynikki

It's been explained to me several times and I still don't get it.  I guess I don't like the idea of putting money away that I may or may not use and then end up losing it if I don't use it.

ETA:  It must be beneficial though because my boss thinks I'm crazy for not having it.

Starr_Mom

You set aside a portion of each paycheck before taxes to use on medical expenses that your insurance doesn't cover (co-pay, deductibles, Rx, glasses/contacts, etc.). It usually goes into an account that you can access with a debit card, although some are reimbursement types where you have to submit receipts and get paid back. It's beneficial because you have to spend that money anyway, may as well do it pre-tax and lower your taxable income.

SumnerBride

My H has a set amount taken out of each paycheck, pre-tax, that goes into an account that's attached to a card.  He can put up to a certain amount in there, per year.

I use the card to pay for co-pays, prescriptions, and various medical things (Motrin, saline, thermometers, etc).  If I ever pay for something out of pocket, I just have to fill out a form to get my money back from the benefits card people.

It's handy I suppose.

dpdw

Money is taken out of your DH's paycheck before tax and put into a Flexible Spending Account (FSA).  You can use those funds for qualifying medical expenses (co-pays, Rxs, contacts, glasses, x-rays, orthodic shoes, etc).  If by the end of the year you don't use all the money you lose it.  The benefit is that it's pre-tax dollars, so depending on your income bracket you could be savings 35% on those expenses, plus it lowers your taxable income.  The trick is to figure out how much you'll need to maximize your savings, but not have money left over.  When I had an FSA I would use any remaining funds on cold meds & contact solution.

camrude

Starr_Mom:

You set aside a portion of each paycheck before taxes to use on medical expenses that your insurance doesn't cover (co-pay, deductibles, Rx, glasses/contacts, etc.). It usually goes into an account that you can access with a debit card, although some are reimbursement types where you have to submit receipts and get paid back. It's beneficial because you have to spend that money anyway, may as well do it pre-tax and lower your taxable income.

What Starr said.

This year we have a debit card - but previous years we submitted receipts. We get reimbursed for over-the-counter stuff too, like Tylenol.

Mrs.JDD

Starr_Mom:

You set aside a portion of each paycheck before taxes to use on medical expenses that your insurance doesn't cover (co-pay, deductibles, Rx, glasses/contacts, etc.). It usually goes into an account that you can access with a debit card, although some are reimbursement types where you have to submit receipts and get paid back. It's beneficial because you have to spend that money anyway, may as well do it pre-tax and lower your taxable income.

You would have a flex account in addition to regular health insurance...maybe you already knew that though.  We have the kind that we have to be reimbursed for.  It is a little annoying, but not bad.  I agree with the part about lowering your taxable income!  It's a good thing.  

 I recommend making a list of things you KNOW you will spend money on...contacts, dentist visits, co-pays, monthly prescriptions, etc.  Add them all up and take out maybe a little more than that in your flex account.  The money you set aside can also be used for over the counter medicines, just save your receipts.  If you figure out exactly what you spend in a year on those things you won't have to worry about taking out more than you need and losing some of your money.

LeoChic

dpdw:

When I had an FSA I would use any remaining funds on cold meds & contact solution.

I never thought about using my FSA card for contact lens solution!  DUH!!

kittycarr

This stuff sounds very good!

Flem052204

We have a healthcare flexible spending account.  I stipulate the amount we want to contribute based on our known medical expenses.  Since it's pretty stable from year to year, I have a pretty good idea of what to contribute.  Besides, there is a grace period--you can still make claims for the first 90 days of the next period.  (I could submit bills from Jan-March of 2009 for our 2008 contribution.)  If you don't think you will use all your contributions, you can stock up on cold medicine at the end of the year, or buy a vaporizer or any of a number of things you could do to make sure you use all the money.  If nothing else, if you have money to spend in December, make appointments to get your eyes checked, a mole checked or anything else you had been putting off for a while.

The money we pay out of pocket for medical expenses is paid for with pre-tax dollars.  Essentially, we give ourselves a 25% discount on medical expenses because we do not have to pay 25% in taxes for that money.

joseysbride

stacynikki:

It's been explained to me several times and I still don't get it.  I guess I don't like the idea of putting money away that I may or may not use and then end up losing it if I don't use it.

ETA:  It must be beneficial though because my boss thinks I'm crazy for not having it.

It's beneficial because the money is not taxed.  If you have certain medical expenses that are fairly consistent every year, or if you have ones that you can plan for, you figure out how much you want to put in your flex account for that year, and most likely you will use it all.  It just takes a little planning, and you can save a lot that way.

MrsStubbs

I know that at the end of the year, I don't lose mine. It is just in a savings account until I use it.

dpdw

-auntie-:

One year my guess was off and a few of my close friends got really good UV rated sunglasses for Christmas.

Just an FYI, that's not a qualifying expense.  The purchase has to be for you, your spouse or your dependent.  You better hope you don't get audited.