What a difference a year makes. Last year I scrambled to spend $1100 remaining in my medical flexible spending account (FSA) by December 31st. This year I spent it all before the end of summer.
One of the tasks this month is to turn in election forms for 2011. The question is how much to have deducted pretax.
Better to Underestimate
Add up your routine and known medical expenses such as regular medications, dental work and exams. This figure should be your cost after insurance. Then one adds in an amount for non-annual expenses like glasses.
Doing this worked for most of the past decade until last year. If I didn’t spend it, it was essentially thrown away. This is the downside of FSAs.
2011 Medical Plans
This year, one dental issue ended up costing a lot out of pocket and I don’t want to repeat it next year. Hearing aids were recommended to my husband a couple of months ago. That expense could easily use the maximum amount my employer allows to be deducted for the FSA.
I’m deducting the maximum and putting extra in my budget for medical expenses. After all, there will be more than just two hearing aids! Maybe I’ll give the apple a day theory a try.
My employer also offers a FSA for child care. My kids were past that age when it was offered although I took advantage of the tax-free reimbursement at a previous job.
If FSAs are offered where you work, do you participate? If not, why?