Flex Spending, Healthcare Savings Accounts, and LASIK
LASIK and Flex Spending
A few years ago, I took care of my vision correction needs on Christmas Eve. Why did I wait till so late in the year? I had a Flex Spending plan with my health insurance provider, and I needed to use the money in my account for medical expenses by midnight, December 31st. If you are already aware of, and have, such a plan, awesome! But in case you are wondering whether you have a Flex Spending plan and how you may be able to take advantage of it, how all of that works is as follows.
First of all, beginning in 2013, the IRS slashed and burned half of the Flex Spending’s annual amount from $5,000 to $2,500. Maybe Americans can do something to restore the erstwhile amount. The good thing was, the whole $5,000 was available January 1st, while the actual amount was deducted paycheck-to-paycheck over the entire year. So LASIK patients, for example, could have the surgery the first week of January.
Beginning in 2013, however, LASIK patients have been using their $2,500 Flex Spending amount for their surgery, early in the new year, and financing the remainder. So this may be a strategy to keep in mind if you are going to have a Flex Spending account in 2014.
For those of you who may be new to Flex Spending, the deadline to sign up, for most health insurance providers, is by the end of October. So now is the time to decide whether or not you are going to fund a Flex Spending Account (“FSA”) for 2014. A similar program is the Healthcare Savings Account, so please see info on that further below. (Image source:http://latimesblogs.latimes.com/jacketcopy/2009/04/money-walks-the-la-times-new-serial-novel-part-1.html)
So some of you just have to “renew” your FSA, whereas others have to find out from your health insurance provider whether the coverage you have under your medical and/or vision plans includes an FSA.
For newbies, the money you elect to contribute to your FSA is pre-tax—no deductions are taken from this amount of money, which becomes earmarked for medical expenses, so that’s a good deal for you!
Even more good news—as indicated above—corrective eye surgery, including LASIK, is one of the many eligible medical expenses for Flex Spending. (See IRS Publication 502 for an entire list of eligible expenses).
Caution: Be sure you are a candidate for the medical procedure or treatment you want before funding your FSA! If the reason you want to take advantage of Flex Spending is solely for LASIK, for example, and you find out that you are not a LASIK candidate and thus cannot have the surgery, the IRS will not allow you to reduce the amount of money you contributed to your flex spending account.
So, in the case of LASIK, you would be very wise to schedule the necessary appointments with your eye surgeon ASAP!
Now, a Health Savings Account (“HSA”), like an FSA, is also a way to save for current and future medical expenses. Because of the tax benefits it offers, as well as the control over how and when money is contributed and spent, an HSA is a popular alternative to traditional health care plans. There are only a few requirements, and an HSA is easy to set up.
For full and detailed information go to: http://www.ehow.com/about_5101447_health-care-savings-account.html#ixzz2dwsqc3tU or other related web sites. But here are a few more important facts about HSA’s for now:
Anyone can open an HSA as long as:
(1) You are covered by an approved High Deductible Health Plan (HDHP);
(2) You are not covered by another health insurance policy (including Medicare); and
(3) You cannot be claimed as a dependent on someone else’s tax return.
You can open an HSA at many banks and insurance companies, and some employers offer an HSA option to their employees as well. Your employer may also contribute money to your HSA.
Happy Flex Spending!