Page 68 - The Informed Fed--Hearn (edited 10.29.20)

FSA – Flexible Savings Account

The Flexible Savings Account is not actually part of your health
insurance coverage, but the open season is the same as the health plans.
You must re-enroll and choose your contribution amounts to the FSA
each year. You may contribute up to $5,000 each year in pre-tax dollars
to be used for health expenses. Depending on your tax bracket, this
effectively allows you to get a 20-40% discount on health-related
expenses because you are paying for those expenses with pre-tax dollars.
You can use the funds to pay medical expenses such as co-pays,
deductibles, dental and vision care, prescription and non-prescription
drugs. Remember, your ability to contribute to the health portion is
limited to use for dental and vision care if you are enrolled in the High-
Deductible Health plan and the HSA. You can also set aside $5,000 in
pre-tax dollars to pay for dependent care for children under the age of
13, parents or other relatives dependent on you for their care and listed
on your tax return. The biggest complaint about the FSA is that if you
don’t use your contributions from the previous year by March 15, you
lose them. You can drive down the street in early March and in any drug
store you will see signs like “Spend your FSA $ here”. You can spend
left-over funds on band aids, aspirin, contact lenses and solution, among
other things. You can get more specific information on how your FSA
dollars can be spent at www.fsafeds.com.

Final Considerations

Choosing Your Plan: If you’re going to compare the health plans
available in your area, you’ll want to start by choosing from the
HMO/PPO/Fee-for-Service options and choose which ones you want
to review. Can you live with the limits of an HMO? If you want a little
more control, you might move toward a consumer-driven health plan or
High-Deductible Health plan. How healthy are you and the members of

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