Insurance…. am i right? Just thinking about it makes me tired and uninterested. It all seems like a scam, but there are some benefits which go underrated. Maybe I’m lazy, but I know I’m tired. And trying to make sense of some of these details can feel like a huge undertaking.
But I want to fill you in on Flex Spending Accounts, or FSAs. FSA basics, if you will.
What is a FSA?
These are accounts which you and your employer are able to allocate pre-tax dollars for health care expenses. Simple! And awesome. If you’re going to be spending money on health care anyway, you may as well use the most conservative option for payment on those bills.
This is an incredibly useful and widely provided option in health insurance. Most companies will actually dedicate a certain amount of money to yours every year (ranging from $500 to $3,000). As of 2017, the maximum amount you can contribute to your FSA is $2,600.
The best part?
These funds are YOURS, and they don’t expire at the end of the plan year!! (HSAs do…. more on that later). It seems obvious that you could keep your own money, but HSAs like to challenge that mindset.
How can you benefit from an FSA?
These funds will be eligible to pay for any and all health care related expenses. Dental visits, emergency care on a random weekend, and routine lab work. The list goes on. But ultimately, any bills you may receive in the mail after the birth can be paid via FSA. You will get a debit card and swipe it! Otherwise, you can be reimbursed once you provide a receipt to your FSA holder. So simple. So amazing.
The funds you contribute will come out of your paycheck, so you don’t have to worry about it. They are out of sight, out of mind, but they are YOURS. This makes meeting deductibles much less stressful, as there are already funds allocated for them (and rolled over every year).
This can ease the burden of worrying about unexpected healthcare costs. You definitely don’t want to be in a position which discourages you from seeking care, and this remedies that!
I don’t have any words of caution, but their are eligibility requirements. You will need to be on a high deductible plan. They are not eligible for the low cost health plans (i.e. those with a copay and larger monthly premiums). It truly works out better, if you ask me. Since you will need the high deductible plan with lower premiums, you are incentivized with FREE MONEY and an opportunity to contribute pre-tax dollars for those services. TAKE IT!
Please let me know if you have any questions or if I left out any FSA basics which you were looking for. I’d love to help you find answers and make your insurance journey less intimidating! Send me some mail 😉 and I’ll get right on it.