Make the most of your flexible spending account before Congress limits the amount you can contribute to it.
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All Contents © 2017The Kiplinger Washington Editors
| February 2014
A flexible spending account offered through your employer is a great fringe benefit that lets you pay medical and child-care expenses with pre-tax dollars. Make sure you take full advantage of it when deciding how much to contribute -- because the amount you can set aside for health-care expenses is now limited to $2,500, a rule change from the health-care law that took effect in 2013. Another big change now permits some employers to allow employees to carry over $500 from one year to the next, although not all plans have made this change (see Big Changes to Flexible Spending Accounts).
We put together this slide show as a reminder of the kind of big-ticket expenses you can pay with medical flex-plan dollars and to encourage you to make the most of this benefit. If you’re unsure whether your employer’s plan covers a specific item, be sure to ask your plan administrator.
Always wanted the latest designer frames but were reluctant to pay the big bucks? You can use before-tax dollars from your FSA to cover the costs of quality frames, even if you don’t have a vision plan at work.
Have you been putting off a diagnostic check or screening? Body scan procedures are expensive, anywhere from $400 to $1,500. But if you can run the cost through your medical flex plan, it’s like getting a healthy discount of as much as 35%.
Braces can cost a bundle, for yourself or your kids. A flex plan can take a bite out of the financial pain.
The potential tax break may make it easier for you to see the benefit of a procedure that has been dropping in cost but still runs from $2,000 to $2,500.
The cost of a weight-loss program, if prescribed by your doctor to treat obesity, can qualify for reimbursement through a medical flex plan. You’ll need to submit evidence of medical necessity when you submit your bill for reimbursement. Summer camps for weight loss range from $600 to $1,000 a week.
Still trying to quit smoking? Uncle Sam will help pay the bills for hypnosis or another smoking-cessation program by letting you use pretax FSA cash. Amounts paid for nicotine gum and patches count, too.
Sorry, you can’t run the cost of a face-lift, tummy tuck or breast augmentation through your FSA. But if you save enough by taking full advantage of your flex plan, well ...
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