Maximize Your Employment Benefits
At 3P Benefit Solutions, we all know that budgeting, saving, and investing are basic elements of sound financial planning, but sometimes we overlook things that can have a profound effect on our financial situation. Employer-provided benefits is a prime example.
Section 125 Cafeteria Plans, group insurance plans, even vacation benefits must be understood in order to work to your best advantage. Let our experienced professionals guide you!
What Is a Flexible Spending Account?
A Flexible Spending Account (FSA), also called a flex plan or reimbursement account, is an employer-sponsored benefit that allows you to pay for eligible medical expenses on a pre-tax basis (there are also similar accounts for dependent and child-care expenses).
If you expect to incur medical expenses that won’t be reimbursed by your regular health insurance plan, you should be taking advantage of your employer’s FSA.
How Does a Flexible Spending Account Benefit Me?
At the beginning of the plan year (which usually starts January 1st), your employer asks you how much money you want to contribute for the year ($2,500 max).
You have only one opportunity a year to enroll, unless you have a qualified "family status change," such as marriage, birth, divorce, or loss of a spouse's insurance coverage. The amount you designate for the year is taken out of your paycheck in equal installments each pay period and placed in a special account by your employer.
As you incur medical expenses that are not fully covered by your insurance, you may either use your flexible spending prepaid debit card to pay for those expenses or submit a copy of the Explanation of Benefits to the plan administrator, who will then issue you a reimbursement check.
With an FSA, You Can:
An FSA is a great way to pay for expenses with pre-tax dollars.
- Enjoy significant tax savings with pre-tax deductible contributions and tax-free reimbursements for qualified plan expenses
- Quickly and easily access funds using the prepaid Card at point of sale, or request to have funds directly deposited to your bank account via online or mobile app
- Reduce filing hassles and paperwork by using your prepaid Card
- Enjoy secure access to accounts using a convenient Consumer Portal available 24/7/365
- Manage your FSA “on the go” with an easy-to-use mobile app
- File claims easily online (when required) and let the system determine approval based on eligibility and availability of funds
- Stay up to date on balances and action required with automated email alert and convenient portal and mobile home page messages
- Get one-click answers to benefits questions
What Expenses Are Eligible for Reimbursement?
Any expense that is considered a deductible medical expense by the Internal Revenue Service and is not reimbursed through your insurance can be reimbursed through the Flexible Spending Account. Examples include:
- Co-payments on covered expenses
- Deductibles, fees paid to doctors, dentists, surgeons, chiropractors, psychiatrists, and psychologists
- Contact lenses and eyeglasses
- Fees for hospital services, qualified long-term care services, nursing services, laboratory fees
- Prescription drugs or prescription co-pays, and insulin
- Chiropractic treatments
- Fees in excess of reasonable and customary amounts allowed by your insurance
How Much Do I Contribute Into My Flexible Spending Account?
It's important to give some thought to calculating how much money to contribute for the year, because if you put in more money than you need, by law, you lose it.
To determine how much to contribute, make a list of the expected out-of-pocket medical expenses for you and your dependents for the next year. For example, if you always exceed your deductible, include the deductible amount in your calculation. Be conservative so you don't risk forfeiting any money.