Understand 5 Most Important points and 5 Benefits of FSA Accounts
Do you have a health plan through a job?
If you do, and it’s a FSA account – it’s probably going to expire soon!
Your Flexible Spending Account (FSA) can be used to pay for copayments, deductibles, some drugs, and prescription eyeglasses. Using a FSA may also help to reduce your tax obligations.
Also known as a flexible spending arrangement; Flexible Spending Account ( FSA Accounts) are special accounts – for which you don’t pay taxes and money it is money you can use to pay out-of-pocket health care costs!
- Flexible spending accounts are generally “use-it-or-lose-it” plans with some exceptions
Understanding FSA accounts:
- Employers may make a contribution to your FSA but they are not required to
- FSA’s are limited to $2550 per year per employer (if you are married your spouse can also up to $2550 in an FSA too)
- Generally, the FSA funds must be used within the plan year BUT employers can give up to 2.5 months extra to use up the funds in FSA —- Or (hopefully)you will be allowed to carry over $500 to the following year.
- At the end of the year or grace period ( if grace periods are available to you), you will lose the money left in your FSA
- To avoid losing it start using it now or within the grace period if you have that option!
Benefits of FSA
- The contributions made by your employer are not added to your income!
- There are no taxes deducted from these funds
- Following the Qualified medical expenses (so you don’t go outside the list of allowed expenses) will ensure that your withdrawals are tax-free. This list includes prescription eyeglasses
- You can make the purchase for any member of your family. (Tax claimed dependents or spouse)
- Did you know that you don’t need vision insurance to use your FSA dollars on prescription eyewear? And if you have a debit card attached to your FSA you can enter it at checkout so you won’t need to deal with submitting receipts or reimbursement paperwork.
Before the end of the year take time to look at your insurance and check on your FSA and if you have it:
- Use it before you lose it in most cases
- Get yourself a new pair of eyeglasses!
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