Do you budget your Flexible Spending Account?
Budgeting a Flexible Spending Account (FSA) is similar to budgeting a bank account. You monitor expenses as you go. Before you get the FSA, you calculate how much you’ll be spending on health care for the year. Think about your family health needs for the coming year, as there may be specific products you’ll want and specialists you’ll need to visit.
It’s important to make a conservative estimate since you can’t change the amount after the open enrollment period is over, unless you incur one of the qualifying events listed in you summary plan description. Sometimes employers let you make changes to your contribution. For example this may be allowed if you get married, switch jobs, or have a baby, but it depends on your plan and what’s allowed. The maximum you can contribute is $2,550 for 2016 and $2,600 for 2017 – per person. So, if you and your spouse both have separate FSA coverage that’s up to $5,100 for your household in 2016, and up to $5,200 for your household in 2017.
Here are steps to help you budget
Use our FSA Calculator to plug in future expenses. Do you know how much money to set aside for healthcare products you’ll need for the year? How many medical services will you seek out this year (dental exams, eye exams and more)?
Shop for Products. Consider products you’ll need throughout the year including over-the-counter items and prescription medications. Think seasonally, too. Sunscreen is FSA eligible and perfect for your next vacation, or first aid kits can come in handy during travel, at home, and in the car, too. If you’re expecting, lots of baby care products including breast pumps, baby thermometers, prenatal multivitamins, and nasal aspirators are covered by an FSA.
Pay for medical services. When was the last physical you had? Have you had your annual eye exam or a dental checkup? The good news is that your FSA can cover expenses related to these medical services (and it can also cover expenses that your insurance plan may not cover).
Account for major medical procedures. If you’re planning on a procedure including LASIK or even orthodontics for a child, you’ll want to budget for that accordingly with your FSA.
Monitor your balance and stay on top of your FSA deadline. Last, but certainly not least, you’ll want to monitor your FSA balance during the year. If you know your FSA deadline is coming, you’ll want to spend remaining FSA funds in time. Are you buying the healthcare products you use regularly with an FSA? You can save a lot of money by buying contact lens solution, first aid kits, hot or cold therapy packs and more by using your FSA.
Learn more about eligible expenses
If you’re still not sure about eligible expenses with a Flexible Spending Account, search our comprehensive FSA Eligibility List, or simply browse the categories on FSAstore.com to learn about covered products.