What is a Flexible Spending Account (FSA)?
If you’ve selected Plan F (and maybe if you’re a Plan C, too) and see a therapist, chiropractor, or other medical professional regularly and therefore will likely need to meet your deductible, an FSA may be a good option for you. If you are part of the AEA, you are not eligible for an HSA (Health Savings Account) through the district like other employees are. However, you can elect for an FSA through this district until May 22, 2020.
What is the difference between and FSA and an HSA? The main difference is that an HSA rolls over from year to year. You can save money in their over long periods of time and depending on the account type, your money can earn interest. An FSA has to be used yearly. This year, the FSA will run from July 1, 2020 to June 30, 2021 and you will have until the following September (2021) to turn in all your paperwork for reimbursement. Any funds not used by June 30 will be forfeit. BUT, you can use these funds for so much! Any qualifying medical expense, such as co-pays, bills towards deductibles, prescription co-pays, and many drug-store necessities such as sunscreen and OTC pain medicines can be reimbursed.
Where does this money come from? During FSA open-enrollment, you can choose how much you want taken from each pay check, up to $2,750 for 2020. This money will be taken out pre-tax, so you will save 15-20%, depending on your tax bracket. So if you have a $1500 deductible, you could elect to have $125 taken out of each of your 12 pay checks before taxes and put in this spending account for you. If you pay about 20 percent in federal taxes, this can save you about $300! Additionally, the funds are available in their entirety on July 1, 2020, even though you won’t even start having them deducted from your paychecks until August.
As of May 2020, I have not yet met my $1500 deductible for 2020 and will have a new $1500 deductible on Jan 1, 2021. I would like to be seeing my therapist 2x a month and visiting the chiropractor for an adjustment and massage 1x a month. I have about $700 more until I meet my 2020 deductible and will likely be able to meet my next deductible by March 2021, for a total of $2200. Additionally, my co-pays each month once I meet my deductible are about $125. For six months in 2020 and two in 2021, I will spend a total of about $1,000 in co-pays. I also like to buy contacts AND glasses, and my vision insurance only pays for one or the other each year, so that’s another $200. Lastly, I probably spend about $100 a year on OTC medicines, ice packs, sunscreen, etc. According to the FSAstore.com calculator, I will save about $718 by putting this money in my FSA before spending it. If I have any money left over, I plan to buy extra contacts or go to ZenniOptical to get some new prescription sunglasses. I go through many pairs since I am so rough on them.
Click here to try the calculator for yourself.
Not sure what is eligible? Click here.
Childcare FSA
I know a lot less about the second part, but you can also put aside up to $7,500 a year for day care expenses. Saving another 20 percent on your day care expenses could be a HUGE cost savings. I don’t have kids, so this one is worth asking HR to help explain to you.
HeyKenna 