Of course, there are some stipulations, such as the dreaded “Use it or Lose it” and the new government-mandated cap at $2500. My family’s out-of-pocket medical expenses run in the thousands each year, so I rarely run the risk of losing money. However, if you are an individual or family with limited medical costs, it’s important to take time each year to calculate what your potential costs might be before selecting how much money you want to put into the account. I particularly loved this benefit when my daughter needed braces; so don’t just pick a number – spend a little time thinking about what medical costs you might have the following year and plan accordingly.
One bummer is that the FSA no longer covers over the counter (OTC) meds. This is horrible for those who suffer from chronic pain that is relieved by nonsteroidals (Advil or Aleve) or allergy sufferers whose meds are now OTC but cost ~$0.30-0.70 per pill. Another challenge occurs when your plan requires you to submit receipts.
Do not despair if your employer does not offer a FSA benefit. check with your local bank. Some offer Health Savings Accounts that can perform a similar function. This may be a great way for folks who have a high-deductible insurance to stretch their healthcare dollar!
~One drop of knowledge can ripple through an entire community