Fsa

lelggren · #1 (**permalink**) 08-24-2006, 09:31 AM

Hi Everyone

I just had a question. At work, we recently had a staff meeting introducing our new benefits. They are starting us on an FSA, but it is not through an insurance company or anything. It is through the same company that does our payroll. It sounds like we will have to pay for everything up front at cash price, and then get reimbursed.

My problem is that they told us at the meeting that we only have $1200 to spend on medical/prescriptions/dental/vision for the year. I can meet that in like 4 months on my own, and my husband's medications would make that speed up some too. I am worried about my pump supplies. We really can't afford to be having to pay out of pocket for everything after that $1200 is out. Is anyone else on an FSA and paying for pump supplies? Can anyone shed some light on how they work just in case I'm misunderstanding? I've never used one, and I'm really scared about it. Can you have another insurance in addition to it?

If this is in the wrong spot, please move it to where it would go

Thanks bunches all!

valc3 · #2 (**permalink**) 08-24-2006, 07:11 PM

Laura, I have health ins and a fsa account. All office calls, scripts, etc are billed to my ins. I use the fsa to pay for copays, deductibles, etc. The max I could put in was $2,000. I was issued a "credit card" to use for the copays. If I do pay cash, I can submit the receipts for reimbursement. I like having the account. I'm on MDI.

rzrbks · #3 (**permalink**) 08-24-2006, 07:26 PM

Isn't this a form of medical savings account?

That's what my wife and I use as we have no Rx coverage.

By law, you're allowed either $4,500 US or $4,800 US (I don't remember which)-------it might be worth it to double check on the max you're allowed.

Edit: just googled and if it's the Flex Plan----they are Supposed to allow the Federally mandated Max

David · #4 (**permalink**) 08-24-2006, 07:52 PM

I use an FSA through work and have $2500 taken out per year for health care expenses. This account can also be used for depend care expenses. Maybe it's only $1200 because it's new for you and only covers a portion of the year?

MY insurance pays their portion of my pump supplies and I pay my portion and get reimbursed by the FSA. A good thing is that I pay with pre-tax dollars. Another good thing is that much of the expenses are early in the year (deductables) before much has been taken out of my checks, so in essence, I get an interest free loan.

David · #5 (**permalink**) 08-24-2006, 08:15 PM

I use an FSA through work and have $2500 taken out per year for health care expenses. This account can also be used for depend care expenses. Maybe it's only $1200 because it's new for you and only covers a portion of the year?

MY insurance pays their portion of my pump supplies and I pay my portion and get reimbursed by the FSA. A good thing is that I pay with pre-tax dollars. Another good thing is that much of the expenses are early in the year (deductables) before much has been taken out of my checks, so in essence, I get an interest free loan.

Took too long to edit, adding here:

The bad thing is that if you dont use it, you lose it. That may be another reason why the limit is $1200. That may be so you don't over estimate your needs and end up losing the rest.

I'm no expert on FSAs or MSAs, but my understanding of them is that they're different types of accounts.

David

Aggie06 · #6 (**permalink**) 08-24-2006, 10:04 PM

Either they didn't explain it correctly, or you have some weird benefits.

*Usually* an FSA is just another benefit to go along with your other medical/prescription benefits. Think of them as 2 seperate items.

The FSA allows you to put pre-tax dollars in the account to pay for your medical expenses. Say for example, a co-pay for 1 month of Novolog is $50.

Without an FSA, you pay $50 of after-tax dollars. If your effective tax rate is 25%, you effectively paid $66.67 in pre-tax dollars.

With an FSA, the money in your account is protected from income tax. You would pay for the prescription with $50 pre-tax from the FSA, and still have $16.67 left over to purchase other prescriptions or medical services.

An FSA is a very good tool when used correctly. Do your best to forecast your healthcare spending for the year and have that amount deferred to your account. You will likely save 20% or more on your medical expenses if you budget the amount correctly.

Like was mentioned earlier, any leftover money in the FSA is "lost". If you do have leftover money you can go to your local drugstore and load up on items like tylenol, cough medicine, or whatever miscelaneous supplies you need to use up the money.

lelggren · #7 (**permalink**) 08-25-2006, 01:11 PM

Hi again

Thank you for all your replies! I was able to speak to one of my supervisors yesterday, and she explained that we still keep our insurance company and that this FSA was just complimentary to that. I was worried because they hadn't mentioned to us that we would still have our regular insurance. So, I was a bit scared because I could use that $1200 so **** fast paying cash price. But, I feel better now

Thank you again!

duck · #8 (**permalink**) 08-25-2006, 02:22 PM

FSA is a good idea if you can manage to use all the funds you put away and actually manage the reimbursments. My first year using an FSA I lost about $150 (back in the 90's). Since then, I have fully use every last red cent in my FSAs.

I've been maxing out the full $5000 the last few years. My supplies alone could run half of that, and with my entire family going to a chiropractor, and for the kids' co-pays for well visits, we exceed $5000 a year in healthcare costs.

What I do to help manage the expenses is I have a credit card (a reward card at that) that I use only for medical purposes. After I spend the medical money, I file for reimbursment and pay the card before the bill comes due. And it's kinda nice building points toward a reward.

Laura, you can use your FSA funds RIGHT AWAY to their full extent: For example, if my calendar year for FSA started January 1, and I took out $5000, and I had a $5500 surgery on January 2, I can file for reimbursment of all those funds immediately. You don't have to wait for your total deposits to equal the amount you request for reimbursment. Does that make sense? It's the only reimbursment account that works this way, for good reason.

Alicat · #9 (**permalink**) 08-25-2006, 08:09 PM

Aggie and Duck are correct in their explanations (I'm a payroll manager and benefits administrator, so this stuff is my job.)

The one thing that I would add is that even though the IRS dictates a maximum of $5000 as an annual contribution amount, each company that offers the benefit chooses the maximum they will allow employees to contribute, up to $5000. That is why you are only able to contribute $1200.

The reason for this is something Duck mentioned - the fact that you can use your funds immediately, even though you may not have contributed the full amount yet through your payroll deductions. If you were to use the full $1200 in January, and leave the company in February, your company eats the difference between what you actually contributed via payroll deduction and the amount you were reimbursed for. Setting an annual limit lower than 5k reduces the potential loss that the company may experience.

FSA's are incredibly helpful when it comes to covering medical expenses and even just buying OTC medication. I highly recommend it.