Flexible Spending Accounts

Flexible Spending Accounts (FSA’s) are a benefit many employers offer. But often employees are unaware of them or don’t understand what they are for. This is a general description of typical FSA’s. It may work differently for your company, so check with your benefits administrator for details.

FSA’s, sometimes called “cafeteria plans” provide a way to spend your pre-tax money on medical, dental and even child care expenses. Depending on your tax bracket, this could save you up to 50% on expenses such as laser eye surgery, glasses, contacts, eye exams and many other vision related expenses. For many people, this makes Lasik eye surgery more feasible.

Here’s the catch. You have to sign up during your company’s enrollment period, which is usually in the Fall or end of the year. That’s all. Even if you have good health care coverage, you still may have enough out-of-pocket expenses to make your company’s FSA useful. Co-pays, non-covered health related expenses (including many “cosmetic” procedures), dental expenses, and sometimes child care can use FSA funds.

You do not have to specify ahead of time exactly what you expect to spend your FSA funds on. You just have to estimate how much you expect to have in qualified expenses in the next year. Do try to be accurate, because if you over-estimate and don’t have enough qualifying expenses to use up your FSA, you will lose the leftover funds. Some of our patients have come in at the end of the year to buy an extra pair of glasses or sunglasses because they over-estimated the cost of a dental procedure they planned to have done that year.

So check with your benefits administrator today to set up your FSA for next year.