I am always looking for ways to save money and now that it is time for open enrollment in my employer’s insurance I have found a new way to make the most of my money.
Many employers offer the FSA where you have money taken out of your check BEFORE taxes and placed in an account. You then access this account
* via debit card or by
* submitting receipts and use up the money that way.
The way my FSA works is that I fax them a cover form and a copy of the receipts I want reimbursed. After verification the money is withdrawn from my FSA balance and deposited into my ING account which I have linked to the FSA. Sweet!
I also have online access to the FSA so I can check to see if something was denied and also see what balance I have left on my account.
Last year I only put in $60 because I was told that you have to use up ALL of the money by the end of the financial year or you end up losing it.
I am NOT trying to lose any money so I put in money that I KNEW I would be able to account for and ended up getting my birth control taken care of that way.
This year I have decided to put in more than $60 (the cost of my birth control for the year under the insurance mail in program) and put in the amount of my copays for regular checkups.
I found out that the FSA can cover the cost of your copays and that is GREAT news.
I get my eyes checked every year (even though I got LASIK and now have perfect vision), go to the gynecologist (want to make sure I don’t end up in the hospital again) and go to the dentist for a cleaning.
The copay for two of those doctor visits is $25 and one is $35 so I need to add in an additional $85 at least to the FSA deduction from my salary.
Since you can also claim things like bandaids and contact lenses and lens cleaner I will be adding in a little bit more to cover those items as well. There is a complete list of items that can be claimed on the FSA website so be sure to check yours for what is allowed.
The best way to utilize the account is to put in EXACT amounts for things you KNOW you will spend so that you are not left scrambling at the end to try to use up all the funds.
I know that my pills cost $60 so last year I put in $60. My copays cost $25 and $35 so I am putting in those exact amounts and then they will be reimbursed.
Some people choose to put in large amounts because it reduces the amount of tax you pay….but I would rather put in what I know I will spend than try to hedge against my taxes and then end up possibly losing money.
At least 1-2 months before open enrollment I start to survey what I spent for the year. Add in co-pays, steady prescriptions, about $100-200 for unexpected things (fillings/root canals/unexpected co-pay) and I average about $1100-$1200 per year and routinely go over that about by mid Oct. (family of 4). I see the difference when doing my taxes in the taxable amount. There are many many things OTC that are allowed. Cough/cold, allergy, midol, etc… If your not sure, I check on drugstore .com and search the item to see if it’s FSA allowed.