Not Sexy - but might save you some $ - Flexible Spending

Hi All!
When this time of year comes around at my employer, we do healthcare open enrollment to decide on our specific plan for the coming year. My company is great, and provides lots of options, which I feel very thankful for.

One benefit that *many* employers provide, but must be enrolled during your open enrollment, is something called Flexible Spending (also known as FSA). FSA allows you to enroll and take money *pre-tax* out of your check, and put it into a fund to be used for medical expenses. Separate FSAs are also available for child care.

So, for example, to use round numbers, if you estimate all the out-of-pocket expenses related to your surgery / testing / etc are $4000, you can set that aside in the account, and have it come out each pay period. Then, as bills come due, you submit a claim and get a check to pay them with. Since my insurance provider handles both medical and FSA claims, I don't even have to do the last part, they do so automatically.

Here are a couple of links that might be of use:
http://financialplan.about.com/cs/insuranc1/a/FlexSpendPlan.htm
https://fsacalc.ceridian.com/fsacalc/fsacalculator.aspx

A couple of warnings - always *underestimate* your expenses. Once money goes into an FSA, by US law, it cannot be carried over to the next year, it must be spent or it is forfeited. It's a "use it or lose it situation". I did not go into 2011 thinking about this surgery, so my FSA for the year is long gone on pre-op costs, but it's better to use it all than to give your money away. Second, I'm not sure how FSAs work with foreign doctors...so, for those of you that may be going to Mexico, please do your homework with your provider prior to deciding how much to put into an FSA. Finally, not all expenses are covered...a change to the rules came in to effect in 2011 - for more, here's the official IRS details:
http://www.irs.gov/irs/article/0,,id=227301,00.html (mainly, you used to be able to claim over-the-counter drugs like tylenol, and can't do so any longer)

If you're planning surgery (either VSG or plastics), please be sure to consider this option during your open enrollment period. Try the calculator - it WILL save you $$$. Folks in my benefits dept are constantly amazed at the number of people that don't take advantage of this terrific benefit.

Hope that helps some of you!
All the best from day 9 of my liquid diet
Karen

 I did this for the first time this year. I get 60 dollars a month taken out of my pay. I am using it right now after I post this. I am going and getting my medications with it and payed for a doctors visit. It is a nice thing to have. To know i have the money for my doctors visit is great. I would tell others to do this also.

I agree completely! I've had an FSA for about ten years now. I paid for my Lasik surgery and my daughter's braces with my FSA, plus numerous procedures for my back. I didn't have enough left in the account to use it for my VSG, but if I had known about it last year when I made my elections, I would have! 

I was seriously thinking about this account back in 2007 when I was planning my lasik surgery.  But the idea of loosing the money turned me off.  So I took out a retirement loan and paid it right back. Better to be safe than sorry.
I think the idea of the FSA is good except the law about not being able to roll it over to the next year. Who exactly gets the money then? your company? the governement?  What if you plan for the surgery and some unforseen cir****tance comes up and your out the 4000 dollars or whatever. Just my two cents...

I see your point, but I think the money you save (pretax dollars) more than makes up for that risk, especially with something like Lasik or dental braces, where you're not at the mercy of the insurance companies like you are with WLS.

I've been using my FSA for about ten years and have never had anything left over. In fact, I usually run out of money halfway through the year.

When deciding how much to put in every year, I consider all my regular medical/dental/vision/prescription expenses for the previous year and use that figure as a starting base. The first few years, I put only a few hundred dollars in it. But as I got older and started having more medical problems, I increased it, and now put about $2,000 a year in. If I am planning a major procedure (like Lasik or braces), I'll put even more in.

I think Crystal hit it head on with her response...she did a much better way of explaining how she estimates. Basically, round down! If you think it may be too much, decrease your estimate to an amount you *know* you will use.

For me, if it's getting close to the end of the year, and we still have some left, I'll buy a new pair of glasses (or sunglasses) - or something like that...it can wait, or you can use the rest of your flex and get them a little earlier!

As far as "who gets the money that's left" - generally, it's whomever is administering your plan. This is how they make their money...they don't really charge your company much for the benefit, but in the end, if you forget to use it, they keep it. Sometimes they keep a portion, and the company gets the rest but must use to diffray other future company medical expenses. The government just sets the rules - they in fact see less money, as when you use FSA, you have less taxable income.

If you are self-employed you can go to your bank and set up a Health Savings Account. All the money you put in there is tax deductable. There are limits and rules so check that out. I don't know all the details but I know it is available.

 If you have high deductible insurance, like I do, you can set up a Health Savings Account (HSA) and put any amount you want in it up to $3050 per calendar year.  $4050 if you are 55 or over.  It generally earns interest, and there may or may not be monthly fees for administering it.  But it DOES roll over and can even be left as an inheritance just like any other money in the bank.  You pay for your qualified medical expenses with a debit card and/or checks depending on your bank or institution.  This money is to be used only for medical expenses and similar things like dental and eyeglasses (same things that are ruled deductible expenses for tax purposes by the IRS) and is tax deductible.  Works out good for me, since I was already on high deductible anyway.

Although some of these may have changed--and I know some did change for sure--since I retired and needed to understand them, some parts have remained the same:

~any money left at the end of the year IS kept by the employer. 
~HOWEVER, you can also use more than you put in and then quit...and then the employer is out the money.  (Once you make your first deposit for the year into that account, you can withdraw the entire year's money.  Some people do that and quit their jobs and go away.  They don't have to pay it back.)
~so that phenomenon--some people underspend, some spend money they haven't put in and then leave--evens out to some extent.

~there are no geographic limitations...you can pay for medical expenses incurred anywhere.  Just get receipts.

~you can do creative stuff with planning...for instance...say your employer allows a $4000 Section 125 contribution...and you have $8000 in medical expenses.  If your doctor can bill some of it in one year...like a "program fee" or testing or that kind of thing and the rest of the expenses in the year of surgery, you can use even more than one year's amount if you time it all properly.