Health Care 101 – Flex It!
Part 3 in our series to introduce you to some basic concepts about your health care.
As health insurance evolves, more and more plans are requiring a higher percentage of “cost sharing” between employers and their employees. The simple co-pay you used to incur when going to the doctor has now turned into deductibles and coinsurance, and in return for relatively lower premiums, the cost of each visit is now larger. With all of these out-of-pocket costs, it becomes even more important to find creative ways to save money while getting your health care.
One method that has been in place for many years is the “flexible spending account”, or FSA. This account, sponsored by many employers, allows employees to withhold money from their regular paycheck before taxes are calculated, and this money is put aside into an account. When you incur a health, dental or other qualifying expense, you can reimburse yourself from the money you’ve saved in the account (up to $2,550 for 2016). The tax savings, depending on your tax bracket can be significant – maybe $300 or more each year.
For those that participate in these plans, March can be an important time. Many plans have a “grace period” after the end of the previous plan year which allows you to reimburse yourself with any balance left in your previous year’s FSA account. For those plans that have a grace period, you can reimburse yourself for expenses incurred (even in the new year) up to March 15th, and then request reimbursement by March 31st. For example, if you participated in the FSA plan in 2015 and have a balance remaining, you can incur an expense all the way to March 15, 2016 and still use the balance you have remaining from 2015. But you need to submit the expense by March 31st to count; otherwise, you forfeit (give up) that balance.
If you participate in a flexible spending account through your employer, take a moment to check to see if you have a balance remaining from 2015 and see if you have expenses you can use against that balance. Something as simple as refilling a prescription or contact lens solution will fit the bill.
