The Pulse of SchoolCare, June 2020
Save money with a Flexible Spending Account (FSA)
Published June 3, 2020
Going into Open Enrollment season, you may ask yourself is an FSA worth it? An FSA is a great way to save money on eligible medical, dental, vision and hearing expenses as well as over the counter medications not covered by the medical plan using pre-tax dollars. If your employer offers an FSA, here are some benefits to consider:
- Save money on things you are already planning to purchase. With an FSA you can save approximately $27 in taxes for every $100 you set aside. This will increase your spendable income and help you pay for health care expenses such as copays, coinsurance, deductibles and more! Click here for a complete list of eligible expenses.
- Access all your funds at the start of the plan year. Your full FSA contribution amount will be accessible on the first day of the plan year.
- All OTC products are now eligible! This means you can use FSA dollars towards all essential items you purchase to care for you and your family such as allergy medicine, first-aid, feminine care, pain relievers, thermometers and more. Click here to shop OTC products at the FSA Store.
How does it work?
Maximizing your FSA benefit to save money is all about appropriately budgeting for the year ahead. For example, say you have the following expenses:
- A $20 monthly prescription ($240/yr.)
- $260 glasses
- $500 deductible for an upcoming non-emergency procedure
That comes to $1,000 in out-of-pocket costs. By electing $1,000 to your FSA, the total will be deducted through payroll over the entire plan year and you can access it on the first day of the plan year. In addition, you will have an extra $270 in your pocket from pre-tax savings (approx. $27 saved in taxes per $100 deducted).
Use this Election Worksheet to help you make a conservative election this plan year.