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

[EMAW_KSU]

We used ours this year for wife's lasik in January. The administrator of the plan has a phone app. I submitted the claim while waiting in the Dr's office and the reimbursement was in my account the next day.

 

[dcfromva]

FSA is really great if expect some qualified healthcare (or daycare) expenses in the coming year. It is exempt from federal, state, social security and Medicare taxes.
Of course if you don't have any need, it would be a waste of money to make an election. Unfortunately, it is use-or-lose it. Some plans give you an extra 2.5 months to spend the money, so that would be good to find out if your plan has a grace period.


Link to FSA wiki

 

[dcfromva]

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!

I agree with this advice. You should check with your plan to see how they handle it. Maybe you can get your provider to invoice it to meet your FSA's requirements. I have found some FSAs work smoothly and some are very prickly when it comes to getting reimbursed for ortho. I have no idea why it is so difficult sometimes. But, maybe pre coordination would help smooth the way.

 

[JohnneeO]

Regarding deadlines, there are typically two end of year deadlines to be aware of;

1) Deadline to incur expenses for a calendar year. So if you have a plan for 2013, you must incur the expense by 12/31/2013 to be eligble for reimbursement. I have seen this extended to March 15 in recent years. If this is applicable, then you would have until 3/15/2014 to incur 2013 plan expenses.

2) Deadline to submit reimbursements. Typically, this has been March 31 of the year following the end of the plan year. So you would have until 3/31/2014 to submit for reimbursements for expenses incurred in the 2013 plan year (including expenses incurred between 1/1/2014 and 3/15/2014, which would qualify under #1 above).

When both of these deadlines apply, then you have 2.5 to 3 months after a plan year ends to finalize spending and request reimburesment before unused money is forfeited.

Of course, YMMV.

 

[mikehn]

Due to the new health care law enacted by our elected officials, I wont mention any names. Starting in 2013, by law, the maximum amount of healthcare FSA you can take is $2500. Prior to the new law, that limit was not in place. Fortunately, we are a healthy family and dont need the full limit. but I can see some families got shafted in a big way.

 

[dreamin_disney]

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.

For our dd's treatment here's how we did ours.

my flex plan is from July-June

DD got her braces April2011 so we couldnt claim for that year
we calculated the ortho plan for July2011-June2012 & July 2012-June2013
So our payments Were broken down to $100 a month

we calculated $1200 for the July2011-June2012
and
$888 for the July 2012-June2013

I believe on ours we would only get paid the $100 a month unless we paid off the full amount example $1200 but i think it depends on the contract or if i paid $150 a month then i can claim the extra $50 so double check.

In my case I had to submit a copy of the contract. Every month i dont need to send in a recipet for ortho . I just add it into the paper work form and I also stick a post it note that has dd's name, ortho for "Month" and the amount $.
I make copies of all my reciepts just incase. I also keep all my cost in an excel document date, service/item, cost, mileage/cost of mileage

Like i submited a for a week ago, well they denied me $107 , I look on my records and see they didnt credit me for ortho. The $7 i have no idea what that is because it's not on my paper copies or excel records. I will call tomorrow and fix error.

Last time they forgot to credit me for my mileage. They are usually pretty good so I'm guessing it might be a new worker on my case.

Tip... start keeping track of copays, meds etc for the next flex year.
example

calculate all the cost for all the appts, and meds you know you will have for sure like:
example
my cost that i know i will have
-well women exam (pap Smear)
-annual exam
-Allergy specialist -2 visits
- x 2for family Dr for highblood pressure i figure 2-3 visit a year
- Rx cost i need for highblood pressure, inhaler meds ea month so i calculate x 12months
-calculate over the counter meds for the year my shoe inserts, allergies
-I also calculate 1-2 urgentcare/aftercare visits per year

Dh hardly gets sick
-annual
-1 urgentcare/aftercare visits per year
-any dental specialist copays he will have to pay
-over the counter allergy meds

DD
-annual
-ortho only(our regular dental cleanings and xrays are covered by insurance )
-allergy specialist 1 visit per year
-ENT specialst 2 visits per year
-Eye exam
-glasses (figure out what insurance covers and low ball the price to be safe)
-contacts, solution

so the above listed items i know I will have so i calculate it and use it as my base

Then i know I qualify for massage therapy(need RX from Dr ) and chiropractor services so i add only a few visits ( low ball it), Then I add mileage for everything i know that qualifies. I usually add a few hundred dollars more but i make sure there are things I can list incase i dont use all the money(remember if you dont use it , you lose it).
extra things like, mouthguard, first aide kit, over the counter meds(must have rx from dr.) etc.

 

[lisaross]

I used mine for the Ortho this year for my son. I am on a payment plan and pay 100.00 per month so i knew for my FSA account that i would be spending atleast 1200 on visits. I have a debit card from the FSA and each month i use that to pay at the visit. The first few times i needed to send in the receipt but not anymore...

For 2013 i will find out how much i still owe and be sure to take out that much for the year plus other dr. visits medicine etc.

 

[mistysue]

An early poster hinted at this, but lets say you elect $1200 for the year, so $100 per month gets taken out of your paychecks. You can spend the entire $1200 on January 1st and get reimbursed before the money is actually held out. Also, if you were to quit or get laid off, you don't have to pay it back. Now if you get laid off before you have spent more than you have funded, they don't have to reimburse you past what you funded.

A medical FSA and a dependent care FSA are different accounts. The rules for them are also different, in that a dependent care one does NOT pay out in advance. You have to wait for it to fund.

Both have different rules for what the caps are by income too. We had both in 2012 and had spent our entire medical year in January, unexpectedly. Then DH only had that job through June.

Also worth noting- if you spend enough to get a tax deduction- you can't deduct the first (is it 10 now?) % of your expenses. But an FSA comes out before anything- that portion of DH's income didn't even show on his W2 at all! It was like it just wasn't there. We didn't spend enough to get a regular deduction but got to have a deduction by using the FSA accounts. The last couple years we haven't been able to deduct anything for child care, but the FSA let us do it that way.

 

[QueenElinor]

Due to the new health care law enacted by our elected officials, I wont mention any names. Starting in 2013, by law, the maximum amount of healthcare FSA you can take is $2500. Prior to the new law, that limit was not in place. Fortunately, we are a healthy family and dont need the full limit. but I can see some families got shafted in a big way.

Yes, that would be us. We use up our maximum ($5000) every year due to ongoing illness in the family- which is not going to go away. Every year we pay our deductible and out of pocket maximum, but there is no maximum on medication copays- one of which is $100 a month. For a copay.

Dropping the amount to $2500 is a way to raise taxes to pay for the program, from what I understand.

 

[mistysue]

Yes, that would be us. We use up our maximum ($5000) every year due to ongoing illness in the family- which is not going to go away. Every year we pay our deductible and out of pocket maximum, but there is no maximum on medication copays- one of which is $100 a month. For a copay.

Dropping the amount to $2500 is a way to raise taxes to pay for the program, from what I understand.

That makes a lot of sense, must be why they dropped that max. Especially with the higher percentage of income spent required to be able to deduct medical that is going to raise tons of money. Even just your family, and if we assume a 15% tax bracket after adding SS that is $675 in taxes. Now do that a million times.

 

[FlyingBelle]

I have 3 accounts that I use - the rules probably vary state, insurance plans, and company - so have a discussion with your benefits contact!

HSA - Health spending account
I use this primarily to cover co-pays for my family's doctor, dentist, and eye visits, as well as co-pays for prescriptions. I figure out how many well-visits each family member needs (I have a baby, so he goes for about 4 a year), as well as a few emergency room co-pays (that's $100 a pop!), and put a little cushion for miscellaneous. This year it covered DH's glasses. I always come up a little short than what I planned for - but that's ok because it's better than having too much. My insurance changed this year - so doctor co-pays and prescription co-pays automatically get reimbursed to my checking account, but I have to pay for them up front. For the glasses - I had to fax the information in and wait a few weeks for reimbursement.

FSA - childcare
This works great to cover pre-school costs! I pay upfront each month, and every quarter I submit the receipt for reimbursement.

FSA - commuter benefit
I take a train to work everyday - so my workplace has a commuter benefit flexible spending account - this is saving me over $1200/year! For this one I get a debit card that gets loaded each month with the cost of my train ticket, taken out of my check pre-tax. Then I just buy my ticket with the debit card. If I had to pay for parking, it would cover that too (I get dropped off at the train). It's flexible enough that I can change the amount if I'm going to be on vacation or something and only want to purchase a 10-ride instead of the monthly pass.

 

[drinkme]

I used mine for the Ortho this year for my son. I am on a payment plan and pay 100.00 per month so i knew for my FSA account that i would be spending atleast 1200 on visits. I have a debit card from the FSA and each month i use that to pay at the visit. The first few times i needed to send in the receipt but not anymore...

For 2013 i will find out how much i still owe and be sure to take out that much for the year plus other dr. visits medicine etc.

This is exactly how mine work with ortho.

Always keep your receipts. I never have been asked to submit a receipt for doctor office copays, but I always have to submit receipts from the dentist.

 

[tasha99]

How convenient your plan is depends on how it's set up. My plan has no debit card--I have to save receipts and fax them in. Also, unlike some other posters, I can't get reimbursed for the money until it's been taken out of my paycheck. As long as the expense is covered in the right year (mine goes July to June), it can be reimbursed, but I have to wait till the money has been pulled.

 

[pgumiela]

I'll be honest I hate my FSA account and will not be signing up for it again in 2013 I will just have $100.00 per paycheck put into my credit union account. It is great that it's a pretax deduction, and I love that on January 1st I have the whole amount that I pledged to put in. And sure it's really convienent that I have a card that I can just swipe.

But here's why I hate it... it's a federal regulation that every so often the company that controls your FSA account has to require a receipt or EOB for what you used the card for. That's cool, I can do that, my company even lets you send it in online or fax it. However, three of the ones that I sent in this year they have declined for various reason. These were doctors appointment! I did not go to walgreens and spend $1000.00 on cold medicine, I had surgery on my wrist, and used my card for the doctor bills. And they are saying that I either overpaid (2 of them I had to go to my Doctor and dispute the charges ), or for my dentist appointment they said that I needed to send the part that I used my card for through my helath insurance. Seriously? So now I have not gotten back to them fast enough... and now my FSA card is frozen and I can't use it to pay for my remaining hospital bills!!!

So yes they are great for some things, but beware of getting those charges that you need to reconcile taken care of or they will freeze your account.

 

[QueenElinor]

That makes a lot of sense, must be why they dropped that max. Especially with the higher percentage of income spent required to be able to deduct medical that is going to raise tons of money. Even just your family, and if we assume a 15% tax bracket after adding SS that is $675 in taxes. Now do that a million times.

I think that's right. It used to be one could deduct out-of-pocket health care expenses if they exceeded 7.5% of one's income, that is going up to 10%. Between that and cutting the amount that can be set aside in an FSA, some sick people are definitely going to be paying higher taxes.

 

[Kdouglas]

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.

We max ours out every year and used it for childcare before I started working from home and now we use it for doctor visits and glasses if we need them. If you're afraid of the use it or lose it rule just make sure you watch what you'll be spending. Anything we don't spend by the end of the pay period we'll blow through on http://fsastore.com/ on non-perishable items. I definitely suggest you tale advantage of it. Your FSA can save you a TON of cash if you do your homework.

 

[SplashMo]

We had an FSA which could be used for most everything. This year however we have an HSA and FSA. Now the FSA can only be used for dental and vision. You just need to read te plan before signing up and it is use or lose...

 

[vicki_c]

We had an FSA which could be used for most everything. This year however we have an HSA and FSA. Now the FSA can only be used for dental and vision. You just need to read te plan before signing up and it is use or lose...

I never heard of an FSA that cold only be used for dental and vision. I thought the IRS set the rules on eligible purchases.

 

[thumbalyna]

There is a healthcare fsa, a dependent care fsa and there is also a hsa. Depending on what kind of medical plan you have determines if you are eligible for a hsa. If you aren't you can use your healthcare fsa for any eligible medical expense. There is a limit of 2500 that you can contribute per year.

 

[lilpig]

We hate are ours. We are not signing up next year. If you don't use the money in the account you loose it. Unless you have a health savings plan that is completely different.