Prepare Today, Save Tomorrow with Health Care Flexible Spending Accounts
You’ve probably heard that Flexible Spending Accounts (FSAs) save you money while helping you pay for your health care expenses. For example, if your taxable income is $35,000 and you deposit $1,500 into your FSA, your taxable income is reduced to $33,500 and you will pay less in taxes. But what is the rest of the story? How can you optimize your FSA in order to maximize your savings?
Preparation is the Key
With Annual Enrollment for 2013 benefits right around the corner, now is the perfect time to start preparing for next year’s Health Care FSA. Many people put off or skip certain health procedures because the expense is too great. With proper preparation and use of your FSA, those expenses can seem more manageable..
If you want to elect a Health Care FSA during Annual Enrollment, you will need to decide the amount to contribute (from $100 to $2,500, a new maximum amount established by the Federal government as part of health care reform guidelines) for you and your dependents to use toward eligible expenses. Because FSAs are “use it or lose it,” meaning you forfeit whatever you contribute but do not use by the end of the plan year, you will want to base your contribution amount on an educated estimate. As stated previously, preparation is the key. Create a list now of health care needs and expenses you believe you and your dependents will have for the upcoming year.
Do you and/or your dependents need dental work? If you haven’t been to the dentist in a while, now is a good time to set up your appointment(s) so you will have a better handle on what dental treatment plans are recommended for the coming year, the costs and the timeline to have the procedures done. Braces, root canals, tooth extraction, fillings, etc., are all procedures that you can estimate the costs of before Annual Enrollment.
When was the last time you and/or your dependents had your vision checked? Do you wear corrective lenses? Even using Banner’s generous vision plan coverage, a pair of glasses can cost more $100 or more if you add tinting, scratch coating and other features. Are you considering LASIK eye surgery? Banner’s vision plan offers a reduced rate for LASIK, and it is an eligible FSA expense. Before this procedure, you will need to conduct research into LASIK surgeons and be examined to determine if you and/or your dependents are good candidates for LASIK.
Be sure to list your routine medical and pharmacy expenses for you and your dependents. Depending on how accident prone your family is, you may want to set a little aside for emergency room and/or urgent care visits. View the list of eligible medical expenses at Discovery Benefits. You may be surprised by what is eligible. Have you been putting off going to the doctor for that backache? Now would be a good time to have your doctor examine you to determine if you will need physical therapy in the coming year (which is an eligible expense).
After you have visited your health care providers and calculated your family’s upcoming eligible health care expenses, you will be better prepared to make a reasonable election for your 2013 FSA during Annual Enrollment. You’ll be hearing more about FSAs in your 2013 benefits enrollment materials in the coming weeks. You can also learn more by selecting the “Financial Benefits” tab of this website. Prepare today; save tomorrow.