I recently discovered the greatness of flexible spending plans and I signed up at the next open enrollment period. This year has been my first year with a flexible spending plan and I can't believe I wasted those first 6 years.
Flexible spending plans differ from each employer. My employer offers flexible spending plans for medical expenses and child care expenses. I signed up for both and chose to put a small amount in each account each pay period. I wasn't sure how much I would need, but I quickly figured out that $25 every two weeks just wasn't going to cut it. Unfortunately, I have to wait until my next open enrollment period to increase the amount.
Flexible spending contributions are taken pre-tax, thus it is a benefit to you. I'm not an expert in taxes, so I can't elaborate much more than that statement, but I am told it is a good thing.
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My medical expense flexible spending plan has been a life saver. My child has conveniently decided to develop allergies and despite the ear tubes, a few ear infections. These have led us to more doctor visits than we expected. The doctor visits require a co-pay and often medications, thus my bank account has felt the squeeze.
Luckily, I have been able to submit claims to my flexible spending plan and my bank account has quickly been replenished. I have been surprised to find that numerous items qualify for my medical flexible spending plan. Any co-pays for appointments or medications qualify as well as over the counter medications and even contact lens solution.
Next year I will definitely have to increase our flexible spending contribution as I have already depleted our small budget for our medical expenses. In my situation, I am able to use my medical flexible spending prior to acquiring the specific amount; however, for the child care plan, I must first contribute the money in my plan before submitting the claims.
My company does not offer flexible spending debit cards; however, I know some do, specifically for medical expenses. These debit cards are designed to work at pharmacies and for specific items that would qualify as a medical expense. The cards are loaded with your annual contribution for your medical flexible spending plan and can be used as needed to pay for those expenses. I am crossing my fingers that my company will move to this type of plan, as it would greatly benefit me.
Even though my flexible spending plans is my actual money, it still feels like I'm being reimbursed for going to the doctor. Even if, I am just reimbursing myself, it is definitely beneficial.
So, if your company's open enrollment is coming up soon, be sure to ask about flexible spending accounts. These are definitely beneficial and great ways to save your money for specific needs your family may acquire.