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Doing FSA Homework Saves Members Money

11/16/16

  08:34:00 pm, by MedBen5   , 263 words,  
Categories: Health Plan Management, Taxes, Consumer-driven Health Plans, Cost savings, IRS, Ancillary benefits

Doing FSA Homework Saves Members Money

FSA cashier

The tax-free benefits of flexible spending accounts (FSAs) helps plan members to save money on their health care spending... but using FSAs to their maximum advantage requires a bit of prior planning.

Many FSA members are currently deciding how much of their salary they want to place into their account. To determine the proper contribution amount, the best strategy is to consider health-related purchases over the past several years and use that as a starting point. MedBen clients can review their recent spending activity by logging into MedBen Access and clicking on “FSA/HRA Online Inquiry” under the “My Plan” section.

In 2017, the FSA contribution limit will be $2,600, though employers do have the option of setting a lower amount. If you're certain that you'll spend the set limit on qualified medical expenses, you can maximize the value of your FSA by making the full allowed contribution. Otherwise, consider your standard annual costs ‒ dental expenses, vision exams and materials, recurring prescriptions, and so forth ‒ and use them as your contribution baseline. Funds will be taken from your paychecks throughout the year, but the full contribution amount will be available for use on January 1.

When planning, it's critical to remember that a "use it or lose it" rule applies to FSAs. While some employers will offer a 2-1/2 month grace period to use up your remaining funds or let you roll up to $500 into the next year, ultimately any unused funds must be spent or forfeited. FSA members unsure about their group's policy should check with their plan administrator or call the MedBen Flexible Spending Unit at (800) 297-1829.

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