[my4littlebuffaloes]

We have always had a flex account and used it all every year. This year however they are charging a $5.25 per month fee to have one. My question is, will the tax savings be more than $63 per year? I am not sure how to figure it out. I was only going to put $1800 in it this year as we have no major medical expenses coming up that I am aware of. We have a $300 deductible per person, so $1800 covers that. Does anyone else pay a fee? I feel like the monthly fee defeats the purpose of the tax savings. But if I am saving hundreds in taxes, then I guess it is worth it.

Can anyone help me figure this out? Thanks!

 

[MsMarieH]

Find out when the fee is paid - is it withdrawn by the employer from your paycheck (which means you still get the max FSA contribution) or is it pulled from your FSA contributions?

The admin fees should be pre-tax dollars, rather than post-tax, so a little bit of money is saved there.

As to whether it is still worth it, chances are that yes it is, but it depends on what tax bracket you are in. In general, you are saving 10-25% of the amount of money off your taxes.

 

[electro-wiz]

Yes it probably is still worth it depending on your tax bracket you will be saving somewhere between $180-$630.

 

[frugalwarrior2]

I never liked them for us. They have your money and if you dont use it does it rolls or is it lost? We always take the pretax medical deductions for ins. but IDK charging a processing fee as they use my monry for free?? And then the chance of losing it??

 

[my4littlebuffaloes]

Ok, so my dh contacted HR to get more info. The fee has always been there - but never listed on the form prior to now. Ugh! Anyway, she ran the numbers for us and the flex account saves us $320 a year after the fees are paid. So definitely worth it.

We have always used all of it - sometimes by June! Braces, eyeglasses, 4 kids, you get the drift. Looks like we are doing it.

 

[Contrary Housewife]

If you're spending it by June it sounds like you need to increase the amount you put into it, too.

Ours went faster than normal this year, too.

 

[my4littlebuffaloes]

It's a fine line between putting in too much and not enough. Some years we are hit harder with medical bills. Many years we put in the max. We are backing off now that the kids are older. I am dropping back this year to make sure we don't have money left over at the end. We just finished this years in the middle of November, so we were close to balancing it through the end of the year.

 

[frugalwarrior2]

see we didnt end up using it but only Dh had prescription glasses and got them once every few years,our dentals back then were just cleanings for the most part and he job hops so much now.
Sounds like it def. is good for you.

 

[MsMarieH]

Remember that you can also use it for other items, like restocking first aid kits, for instance.

 

[bigkims1995]

I came across the same issue.

 

[NikoSan999]

Yes, I know this is old thread. I've never had one and the only time I can remember it being offered I didn't take it because if you didn't use it you lost the money. That just doesn't seem right. I suppose I could have done maybe even a few hundred but back then we really didn't have a lot of medical.
If I had it to do over again I probably would.

 

[Russ]

It depends on the type of account. An HSA is a Health Savings Account. It's yours, forever and it rolls over every year.
My employer put $600/ year in it for me and I can contribute what I want. Basically it reduces my tax bill, though not by much.

 

[Russ]

A health savings account (HSA) is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP). The funds contributed to an account are not subject to federal income tax at the time of deposit.

 

[Russ]

A Health Reimbursement Arrangement (HRA), commonly referred to as a health reimbursement account, is an IRS-approved, employer-funded, tax-advantaged employer health benefit plan that reimburses employees for out-of-pocket medical expenses and individual health insurance premiums.

 

[Russ]

A Flexible Spending Account (also known as a flexible spending arrangement) is a special account you put money into that you use to pay for certain out-of-pocket health care costs.

You don’t pay taxes on this money. This means you’ll save an amount equal to the taxes you would have paid on the money you set aside.


I think the HRA and the flex account do not roll over.

 

[Livin Large]

An FSA is a gamble for you and the insurance company.

If you stay employed all year with the company and don't use the money - they win.

Or, in my case, I was job hunting, signed up for the full amount, had Lasik and spent all the money, left the company half way through the year and didn't have to pay back the rest.

 

[mndtrp]

With my company, if you have a certain insurance plan, you get an employer-funded HRA, with an employee-funded FSA. Costs come out of the HRA first, and then from your FSA. The FSA has a grace period of 3 months at the beginning of each year for you to use up the previous year's contributions. After that, it is lost.

I personally have a plan with an HSA. At the moment, my children are sucking those contributions out about as fast as I can put them in, so it's not really building. The tax benefits are all I'm getting out if at the moment. Hopefully, in the future, the money can start building somewhat in anticipation of when I'm retired.