I Fell off the FSA Tightrope in One Month

by Kay Lynn

Yaquina Monster needs Dental Work

Using the medical flexible spending account (FSA) is one way we stretch our budget every year.  Each December, I carefully consider the expenses we will  have (prescriptions, doctor visits, dental cleanings, etc.) and then add some extra for unknown.

It’s a tightrope balance between selecting too much and risk losing the money or not enough.  This year I fell off the tightrope already!

An Unplanned Expense

During my quarterly cleaning appointment earlier this month, my dentist decided to call in a specialist for one troublesome area.  He sent me to a periodontist for help with a problem around one tooth which is a dental implant.

Next week I’ll be having  gum surgery including getting a bone graft. The cost is large; I could have gotten dentures three times over for the money that has been spent on this one tooth over the years for a root canal, crown, implant, new crown and now this surgery.

My goal is to keep my teeth throughout my lifetime so this procedure was the only option.

Insurance Fortune

If I had known about the surgery last month, I would have allotted the maximum amount for my FSA.  Instead, it’ll be gone next week and I’ll be paying all other out of pocket medical expenses with after tax dollars.

But there is one bright spot.  My dental plan pays $1,500 in benefits per year which this will use completely. That’s not the good part.

The good news is that this year my employer is changing insurance carriers February 1st so I get another $1,500 for the year.

Emergency Funds Work

The remaining several hundred dollar balance after FSA and insurance will come out of our emergency fund.  You know that account with money in it just waiting for life to throw a wrench in your plans.

If you don’t have one of those accounts, before you start sending every extra penny to pay off debt or buy a new shiny toy start saving!  You really need at least three months income set aside at a minimum.

We can’t control every expense or plan for every problem in life.  What we can do is be ready for it!

Do you have an emergency fund?  When have you needed to use it?

photo by: Old Sarge

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JoeTaxpayer January 27, 2012 at 6:26 am

Kay, sorry to hear this. Dental is really a wild card in this issue. Jane’s root canal work or the timing of Jane 2.0’s braces both blew away our FSA numbers over the years. These are among the reasons that a bit of reform is in order for the FSA rules.

Yes, we paid these out of savings.

Khaleef @ KNS Financial January 27, 2012 at 10:25 am

Last year we experienced something similar. We set aside $1,000 (down from our usual $1,500) in our FSA, and then her doctor switched her to a prescription which isn’t covered by our plan.

That’s why we are trying to build up a good size emergency fund even while we have debt!

shanendoah@the dog ate my wallet January 27, 2012 at 10:57 am

Dental surgery is the worst.
I know it feels like you fell off the wagon, but at least you’re using yoru FSA. I’ve never used mine. I keep telling myself that if we have kids we’ll add money to it, but otherwise… (bad finance blogger, I know)
And, you have an emergency fund. And honestly, I’d rather have too little in the FSA than too much.

krantcents January 27, 2012 at 11:42 am

There is always something and that is why an emergency fund helps. There is always an umplanned dental or medical procedure that just comes up. At my age, I feel like my warranty ran out. Some of the things that occurs now were done 40-50 years ago.

Dave Hilton January 27, 2012 at 2:37 pm

Usually we’re scrambling to use all our money before the end of our plan year. But this year we’ve almost used it all already (our plans start in July & September) & we have several months to go.

However, without taking advantage of the FSA or HSA…we’d be spending a fortune out of pocket!

Maggie@SquarePennies January 27, 2012 at 8:49 pm

I feel your pain! We don’t have dental insurance and I hold my breath hoping I don’t need major work. When my husband retired he lost the dental insurance and our dentist said it wasn’t worth it to buy, in his experience. So we’ve been limping along without it, paying as we go. Fortunately we have enough saved to cover the expense, but it hurts just the same!

Kay Lynn January 31, 2012 at 12:22 pm

Maggie, I think it’s helpful for the two of us but that might be because we’re at the age of expensive maintenance (crowns, bridges and more!).

Corey @ Passive Income to Retire January 28, 2012 at 5:28 am

Wow – so sorry to hear that. At least your employer is conveniently switching plans. Ughh. what a mess. But then again, thinking about surgery makes me feel sick. 🙂 Good luck with the surgery.

Kay Lynn January 31, 2012 at 12:20 pm

Thanks, Corey. I’m getting ready to go and am a little nervous but I’m sure it’ll be fine.

Joanne Gregory January 29, 2012 at 12:16 pm

We have always had an emergency fund and I never let my kids forget that they need to have one too.

Kay Lynn January 31, 2012 at 12:21 pm

Joanne, that’s great. One of my regrets is that I wasn’t the best role model for my kids in terms of finance. Hopefully, they’ll learn from me now.

Evan January 30, 2012 at 9:36 pm

Is the only difference between an FSA and HSA is the need to use it by the end of the year? I have neither…if that is the only difference why not just use an HSA?

Kay Lynn January 31, 2012 at 12:20 pm

The HSA is used normally in conjunction with high deductible insurance plans. I have a traditional HMO insurance plan but use the FSA for glasses, copays and other medical supplies. Last year my husband got hearing aids and we used the FSA for the $2,000 price tag!

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