Is This Your Situation: Deciding if Flex Accounts Are Right for You
With our health care plans today, it's always annoying to have a doctor or dentist visit and then have to lay out a certain amount of money for a co-pay. Not only that, but most times another co-pay is needed to pick up prescriptions, too. It's more money than many have set aside from their paychecks. Whether you're an employee who hasn't taken advantage of your company's flexible account or a company thinking of offering one, a flexible spending account can be a great idea.
Flexible spending accounts (FSAs) are accounts in which a percentage of money is automatically set aside to cover medical expenses and co-pays. Your employer offers them, and no taxes need to be paid on the money that goes into these accounts. The money you put into them is sometimes matched or supplemented by your employer, depending on the place of business as well. A little over $2,500 can be put into an FSA each year, and it's easy to access the funds. Indeed, some companies give out a debit card used only for the account to directly pay for expenses from the FSA.
In addition to prescription medications and co-pays for doctor and dental visits, FSAs can cover a whole lot more, too. According to healthcare.gov, and the IRS's website, these accounts can cover things like contact lenses, hearing aids, chiropractor visits, wheelchairs, wigs and insulin. Women's health issues like birth control and pregnancy test kits can be covered as well. Check the IRS's page for a full list of events an FSA can cover. You might be surprised by what is a coverable expense.
If you have ever gotten annoyed with having to hand over small payments for every medical expense out of your pocket, a flexible spending account is something you should talk to your employer about. With this, you will have a safety net for each time you need to make a qualified medical payment. We can never predict our health needs, but we can certainly prepare for them.