In 2011, Americans spent an average of $7,960 per person on healthcare related expenses. This represents more than 17% of the average American income. With healthcare costs on the rise, you might be looking for ways to pay less for medical bills without sacrificing care.
Adding a Flexible Spending Account (FSA) to your traditional healthcare coverage can help reduce your medical spending.
What are Flexible Spending Accounts?
A Flexible Spending Account (FSA) is a savings account. You can only use the funds in it to pay for medical expenses. The money you contribute to the fund is not taxed.
When you pay for medicine or treatment, you initially pay out-of-pocket. You then submit a request for reimbursement. If your expense qualifies, you will receive a check for your full costs.
Not all expenses qualify for reimbursement. Fees that are not covered by your primary insurer are eligible, as are prescription and over-the-counter medications. Plans vary on coverage of equipment like crutches, special bandages, and testing supplies.
You can be enrolled in a traditional health plan and have a FSA at the same time. While employers may offer FSAs as a benefit, they don’t have to contribute to it. As of 2015, contributions to FSAs were limited to $2500 per account.
Benefits of FSAs
Since you do not pay income tax on funds deposited into a FSA, your overall tax liability is reduced. That translates into a smaller tax bill at the end of the year.
If you have a medical condition that requires frequent treatment or pricey medications, FSAs are a great way to make paying your deductible and copays painless.
Families with small, active children can use FSAs as a safety net. If your child gets hurt playing sports or needs emergency dental services, you can get the treatment they need without worrying about how to pay.
Is a FSA Right for You?
Ramey King Insurance has been offering personal insurance products, like FSAs, since 1881. Let us help you find the right insurance plans for your unique needs and lifestyle. Contact us today to find out how a Flexible Spending Account can lower your personal healthcare costs.