Can someone explain (FSA) flex spending acct to me?

[curlyjbs]

My employer is offering this in 2013. Not familiar with it at all. We live in NJ if that matters. Thanks!

 

[zurgswife]

You agree to have X amount of dollars taken out of your check (before taxes). You are then able to use a Debit card to pay for prescriptions, OTC meds with this card. The thing you need to make sure is that if you aren't sure how much you spend per year always under estimate; the amounts don't roll over if you don't use it all by the end of the year.

If you agree for 2500 and are paid twice a month..about 96 dollars will be deducted every pay period. Yet, you are not limited to what you have in the account to pay something. At least that has been my experience. If I had a prescription bill that was 120 dollars but only had 80 in the account but there were still many pay periods left in the year I would be able to make the purchase and then next deduction would account for the negative balance.

Hopefully that makes sense.

 

[SC Minnie]

We can also use ours for dependent care such as child day care. Some people here have used the FSA for Lasik surgery and the amounts not covered for glasses or dental work if they knew those expenses were going the be coming.

As zurgswife said be mindful of how much you decide to put in there. If you have anything left at the end of the year you lose it. It doesn't roll over and you can't get it back.

 

[Paticake]

Love it for Dr. visits, dentists, deductables and prescriptions. Mine is on a Mastercard. Sometimes you are required to submit receipts

 

[mapmakerj]

Your acct may vary as to what you can use it for but I can tell you what ours covers. It is an account that you can deposit pre-tax money in to pay for some non-insurance covered medical expenses and sometime childcare. We can use ours for any co-pays for doctor or dentist visits, co-pays for prescriptions, some over-the-counter meds, medical procedures not covered by insurance (my laser eye surgery) and for daycare expenses. We saved 100's of $$ on my lasik due to paying for surgery with money we were not taxed on. You, however, need to figure out how much you will actually spend on those things in a year and not over estimate because if you do not withdraw all the money in the account by year's end you will lose it. You give your employer a total of what you want put into the account and they divide it by the number of paychecks you will receive in the year and then they take that amount out of each check and deposit it into your account before they tax your income. This works out well if you have monthly meds you know you will need or a fixed amount for daycare. We do not have a debit card, we pay out of pocket and submit our receipts and they send us a check.

 

[powelweb]

You have to estimate carefully for the year, as if you don't spend it by the deadline, you will lose the money from your account.

Also, I prefer to use my own credit card to get the points, and then submit receipts for reimbursement online which is quick and i have it direct deposited to our bank account.

 

[cyndik1111]

I've been using one for years in NY. Starting Jan 1 they take out a pre-determained amount of $ from each pay check (before taxes). Then every time I (or my DH/DD) have a copay for doctor's visit, prescriptions, etc I either use the "debit card" that they provide, or save the receipt and submit it to the flex account company. If you use the debit card (not all pharmacies/stores/doctor's offices takes them) you have to save the receipts. They can audit you. I have been audited once.
If you pay out of pocket, then submit the receipt and they will either send you a check or deposit into your checking account (if you have that set up). Our Flex Company takes FOREVER to reimburse. So I like to use the debit card when I can.

I have used the account to pay for eyeglasses (Rx) & contacts, medical supplies that I had a Rx for, and even orthodontist costs. They use to let you use it for over the counter medicines like motrin, but they changed the rules.

It is definitely worth doing. You just need to have a good ballpark of what you spend each year. Like a PP said, underestimate. If you don't use it by the end of the year, you loose it. I always buy eyeglasses in December.

A few years ago, I bought expensive Rx eyeglasses in January. Only a few dollars had been taken out of my check. I submitted the receipt right away, and got the full amount within 1 month. I then had a negative balance until my paycheck deductions paid it back.

 

[kellia]

You agree to have X amount of dollars taken out of your check (before taxes). You are then able to use a Debit card to pay for prescriptions, OTC meds with this card. The thing you need to make sure is that if you aren't sure how much you spend per year always under estimate; the amounts don't roll over if you don't use it all by the end of the year.

You can't use it for OTC meds anymore, unless you have a RX from your doctor for them. That ended last year (2011). It can be dr visits, RX, vision, eyeglasses/contacts, dental, etc. We have a flex card for both medical and daycare. This will be the first year we (knock on wood!!) will have some extra on the medical flex account, so I will just buy some extra contacts in December!

 

[tripletots]

It also covers bandaids and contact solution and contact storage cases. However, I don't know if that also changes in 2013.

 

[curlyjbs]

Thank you all! I get it now.

 

[yoopermom]

There's a huge difference in convenience between whether your company actually issues you an FSA debit card vs having to pay it yourself, then submit it for reimbursement. Up until this year, we had the card, and I had enough withdrawn to meet our out of pockets and deductibles, which was WONDERFUL (since we doctor quite a bit). This year they "backtracked" to me having to submit for reimbursement, and it's just too slow to even be worthwhile.

Terri

 

[furb & dez]

One important thing is to make sure this is actually an FSA and not an HSA. The two have very different rules.

 

[Fire14]

Your telling me I can use FSA to buy new contact lens cases? I need to go on shopping spree I have used ours for copays, Contacts and glasses, plus contact solution. Dh has used it for drug copays, and who knows what else. I so wish I could use it to buy my iron which is techinally ordered by my MD but script is outdated and I'm not paying to be told I'm fat, need this and that and come back in a month so we can spend more of your money.

 

[linda0706]

Another advantage that hasn't been made clear previously, is that you are using pre-tax dollars. So if your salary is $50,000 and you put $2500 into your FSA, your taxable income is only $47,500.

 

[TJHutch]

Drugstore.com is a good online source to shop. Click on the FSA tab. It helps take the guess work out of what is covered or not. I especially like it at the end of the year, if I have some dollars left over I need to spend.

 

[tar heel]

It's really a no-brainer unless you have absolutely no medical expenses. You save whatever your tax bracket is on the money, which is available January 1. You do have to spend it all or you lose it, but most plans give you several months after December 31 to do that. We've never had any left at the end of the year - if we did, we would buy new glasses, stock up on contacts or get dental work done.

 

[ThisIsTheYear]

I loved having FSA accounts. It was nice to use the 'Benny card' for prescriptions and the Childcare plan was great. I paid for most of my Disney trip with the reimbursement check.
Ps - I'm not sure if someone mentioned this before, but to buy OTC products, you need a doctors note. I am also from NJ and I'm not sure if that's a state thing.

 

[friend2Figment]

How do they work with ortho treatment? My dd's braces will be on more than a year so do they pay out when they are put on or do I need to submit something when they are taken off? I was hoping to find a way to save $ but was not clear on how it really worked.

 

[dreamin_disney]

I love mine. It has come in very handy. I pay for serives then send in my recipets and get a $$ automatically desposited into my checking acct. It takes about a week to get reinbursed.

I've used ours for
-dd's glasses
-dd's contacts
-dd's braces
-dd's advil for pain after certain othro adjustments(RX is needed by Dr.)
-dd's /hubbys over the counter allergy meds(RX is needed by Dr.)

-my massage therapy for my back/shouldar pain(RX is needed by Dr.)
-reflexology plantar faciitiis-right side of body has issues(RX is needed by Dr.)
-chiropractor
-accupuncture( in the past)
-shoe inserts for arch/ball support(plantar faciitiis)
-dental mouth guards

We also use it for
-Dr. visit co pays
-RX meds
-mileage to Dr. visits, massage therapy, chiro etc


In the past my work limit was
$1200.00
$2200
$2500(this year )

Lets just say I max out within 5 months, so far this year Its $2500
I have $482 left and I have 9 more months to go before the plan starts over

 

[apnep]

How do they work with ortho treatment? My dd's braces will be on more than a year so do they pay out when they are put on or do I need to submit something when they are taken off? I was hoping to find a way to save $ but was not clear on how it really worked.

Watch out. Make sure you read over the rules for ortho. We paid our bill in full for DS8's treatment and I expected to get it all back at once. But what happens is they pay it out over the course of the treatment, so technically if treatment is supposed to last two years, they break down your payments over two years. Be careful how much you set aside for your ortho expenses.

Regarding OP's original post, not everyone gets a debit card to use for medical with their flex spending account. We don't. We have Aetna. For us, we go to the doctor, pay a co-pay if necessary, or we will be sent a bill after the doctors submits to insurance. Whatever our responsibility is (what's not covered) gets direct deposited into our checking account and then we pay our doctors. Whatever co-pays we have gets direct deposit also. It usual comes in about a week later.

We love our flex account because it's all pre-tax. Unfortunately, next year, we can only set aside 1/2 the amount because of new rules. We are still going through ortho treatments...

Good luck!