Are you ever surprised to find an extra dollar or two in your pocket? Money you may not even remember putting there? If you have a flexible spending account, it can be a little bit like this – you may have been tucking away some of your pre-tax dollars for particular medical expenses, and now time is running out to use it. Hilldale Dental knows when this type of account is used correctly, it can be a great way to stretch your dental health care dollars.
Our team is going to help you learn more about the importance of using your flexible spending account, or FSA, in our next few blog posts. We’ll explain why it may be important to use up your account dollars now, what could be covered at our clinic by your FSA, and how to figure out what to set aside for the year ahead.
First, the idea behind an FSA is pretty simple: estimate your health care needs, set aside the approximate amount, typically taken through a pre-tax paycheck deduction; then use it to cover certain approved health care expenses throughout the year. The savings, according to a recent Mercer Survey, can add up to more than 20 percent!
So what’s the catch? You’ll want to make sure you allocate what you’ve saved in your FSA for appropriate expenses, and use any left-over funds now, otherwise you may end up forfeiting the unused amount at the end of the year. The Treasury Department updated its dreaded “use it or lose it” rule in 2013, and it allows an employee to spend up to $500 of unused money still in their FSA at the end of a plan year– in the following plan year. But, the new rule contains a few questions: Did your employer amend its plan documents to allow the $500 carry over? And was the former grace period allowing employees to spend down unused money during a two-and-a-half month period following the end of a plan year, dropped? The new rule forces employers to choose between the old grace period, and the new $500 carry over provision. If you aren’t sure which one is part of your FSA, you’ll want to check with your plan administrator for the updated rules.
Watch for Part 2 of our “Flex Your Money Muscle” FSA series: The dental expenses covered by your FSA now, and how to estimate what you’ll need in 2015
