Reminder- Flexible Spending Accounts

[James48843]

Reminder-

If you have a Health Care FSA Account, or a Dependent Care FSA account, NOW is the open season to renew for 2009. There are just 26 days left to sig up for 2009, and it does NOT automatically renew each year.

The Open Season for renewing is NOW.

http://www.fsafeds.com

This is a benefit- "pre-tax use of money" that was gained through the hard work and lobbying of multiple Federal Employee Unions throughout the 1990's and early 2000's.

You MUST sign up each year to be able to use it.

 

[Callme_CO]

ok i'm fairly new to this all can someone explain to me the benifits of the FSA? i'm reading up on it right now but maybe someone could break it down simple for me.

 

[Frixxxx]

ok i'm fairly new to this all can someone explain to me the benifits of the FSA? i'm reading up on it right now but maybe someone could break it down simple for me.

This is an awesome way to get the tax benefit up front for medical expenses....Normally, when you try and deduct medical expenses it has to be at least 7% of income. If you use this method, it is not taxed out of your pay. Then anything you buy for "medical" gets expensed to the account. My friend elected to put in 2K for his triplets braces. He thought he could use the money over the period he was paying in to the account. The interesting part was he had access to ALL the money before he even put in. You can expense aspirin, cough syrup, bandaids, all kind of things....Good Luck this year!

 

[Callme_CO]

so what about dental stuff. I need dental work that will add up to almost 1500 between my wife and I. will this cover it?

 

[ChemEng]

Our FSA has covered 100% of our dental cost for the year.

I would recommend calling the number on their website to make sure your dental stuff is included. (I'm inclined to think yes though.)

 

[Guest2]

Our FSA has covered 100% of our dental cost for the year.

I would recommend calling the number on their website to make sure your dental stuff is included. (I'm inclined to think yes though.)

Are FEHB BCBS premiums deductable from your FSA, if so, how does it work?

 

[XL-entLady]

Are FEHB BCBS premiums deductable from your FSA, if so, how does it work?

Hi Squale, retirees don't get the FSA benefit so I've quit paying attention to the rules there. But if I remember right, health insurance premiums are NOT reimbursed from your FSA. You have to pay for a health cost such as a doctor visit or a prescription drug or contact lenses, and then you fill out a form and submit your receipt to the company that oversees your FSA. I used that as one of my litmus tests when I had a FSA: does this medical expense result in me getting a receipt? If so, it is probably covered under my FSA. If not, it's probably not covered.

There were exceptions but it seemed like that was generally the case. I miss my FSA. I saved big bucks on my taxes with that account. Oh well, such is life. :cheesy:

Lady

 

[Guest2]

Hi Squale, retirees don't get the FSA benefit so I've quit paying attention to the rules there. But if I remember right, health insurance premiums are NOT reimbursed from your FSA. You have to pay for a health cost such as a doctor visit or a prescription drug or contact lenses, and then you fill out a form and submit your receipt to the company that oversees your FSA. I used that as one of my litmus tests when I had a FSA: does this medical expense result in me getting a receipt? If so, it is probably covered under my FSA. If not, it's probably not covered.

There were exceptions but it seemed like that was generally the case. I miss my FSA. I saved big bucks on my taxes with that account. Oh well, such is life. :cheesy:

Lady

Thanks Lady, Appreciated !

 

[James48843]

CAN FSA (pre-tax money)be used to pay insurance-

Answer: No.

CAN FSA claim sooner than the amount saved?

Answer: Health care yes; dependent care no.

Two kinds of Flexible Spending Accounts-

1. Health Care
2. Dependent care. (typically Child care).

There was a change last year. Prior to last year, you could "claim" long before you actually made a deposit into the FSA account, and it would be paid right away. The FSA contractor took a beating on that, and employees loved it.

Appearently, they changed the rules for 2008 for the DEPENDENT CARE FSA, (NOT THE HEALTH CARE FSA) , and now you can claim, BUT IT WILL NOT BE PAID, until AFTER you put sufficient money into the account to cover it. This was a change from the original design of the program. (This affects dependent care only).

The flip side of this change is: Prior to last year, if you hadn't spent all the money by December 31st, you lost any money left over. When the did the other change, they also changed this- and now you have a "grace period" after the end of the year to expend a little more and clean out your account.

More information about using pre-tax money from a Flexible Speding Account for either health care expenses that are not covered by insurance, and also information about dependent care Flexible Spending Account, are here:

https://www.fsafeds.com/fsafeds/SummaryOfBenefits.asp

Good luck.

 

[ChemEng]

There was a change last year. Prior to last year, you could "claim" long before you actually made a deposit into the FSA account, and it would be paid right away.

IMHO--This is one of the best features of the Health Care FSA. There aren't too many cases where you can take 0% loans (actually <0% if you consider taxes) and this one is sponsored by our good uncle.

Here's the scenario:
1. It's January and you have setup your Health Care FSA for $3k across the calendar year.
2. In January, you have set up some surgery in advance that insurance wouldn't regularly cover for $3k (LASIK in my case).
3. After the surgery you get the bill and submit it to FSAFEDS.
4. 1 week later they deposit the $3k into your checking account.

So how is this situation advantageous?
1. You have contributed far less than the $3k to your FSA account. This is the 0% loan I was talking about earlier.
2. You reduce your tax liability by tax%*$3k.
3. If you use a rewards credit card to pay for the surgery, then you actually make even money from the program. (For example on a 1% cash back card in the above scenario. 1% of $3k is $30. When you repay the $3k back to the card from the reimbursement, you will have 'made' $30 in addition to the reduced tax liability.)

 

[Frixxxx]

CAN FSA (pre-tax money)be used to pay insurance-

Answer: No.

CAN FSA claim sooner than the amount saved?

Answer: Health care yes; dependent care no.

Two kinds of Flexible Spending Accounts-

1. Health Care
2. Dependent care. (typically Child care).

There was a change last year. Prior to last year, you could "claim" long before you actually made a deposit into the FSA account, and it would be paid right away. The FSA contractor took a beating on that, and employees loved it.

Appearently, they changed the rules for 2008 for the DEPENDENT CARE FSA, (NOT THE HEALTH CARE FSA) , and now you can claim, BUT IT WILL NOT BE PAID, until AFTER you put sufficient money into the account to cover it. This was a change from the original design of the program. (This affects dependent care only).

The flip side of this change is: Prior to last year, if you hadn't spent all the money by December 31st, you lost any money left over. When the did the other change, they also changed this- and now you have a "grace period" after the end of the year to expend a little more and clean out your account.

More information about using pre-tax money from a Flexible Speding Account for either health care expenses that are not covered by insurance, and also information about dependent care Flexible Spending Account, are here:

https://www.fsafeds.com/fsafeds/SummaryOfBenefits.asp

Good luck.

Thanks for the update,,,,I was under the impression it hadn't changed....You Rock Jimmy Boy!

 

[alevin]

The website tells you what expenses are covered and which are not. Basically nearly everything other than premiums and cosmetic surgery (for general purpose cosmetics) is covered. But if you are unsure of anything, check the website.

Dental, not to worry. BS/BC dental coverage is a pittance, FSA has covered everything dental for me beyond the BS/BC tokens.

The real key is tally up what you think your outofpocket costs next year will be, based on normal anticipated estimate. I go by last years outof pocket costs, subtracting anything that would not normally be expected, like major surgery unless you are already anticipating something like that.

It is better to underestimate than overestimate, because any FSA you don't use up within the time allowed, goes to FSAs pockets, not yours. Best to estimate as close as possible tho, that way, you have the greatest benefit from the deal.

 

[ATCJeff]

so what about dental stuff. I need dental work that will add up to almost 1500 between my wife and I. will this cover it?

yes

 

[ATCJeff]

Are FEHB BCBS premiums deductable from your FSA, if so, how does it work?

No...