Published March 9, 2023
Open enrollment begins next month. If your employer offers an FSA and you’ve never signed up for one, 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:
Maximizing your FSA benefit to save money is all about appropriately budgeting for the year ahead. For example, say you have the following expenses:
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.
Use this Election Worksheet to help you make a conservative election this plan year.
It’s important to set aside only what you expect to spend in a year. Your FSA benefit does not roll over from year-to-year, so be conservative with your election. Some plans allow up to a $500 roll over of funds or a two-and-a-half-month grace period. Make sure to know what the rules are for your plan so you don’t lose out on money at the end of the year.