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An FSA is a flexible spending account: if your employer wants to offer this, and you want to accept, you can have so much a paycheck deducted, pre-tax, and made available for you to spend on qualified medical expenses. The catch is that the expenses have to be in the calendar year, and any money you don't use that way is forfeited. So when I had the chance to set this up at my current job, I made what seemed like a reasonable estimate of what I'd spend by the end of December, subtracted 10%, and asked them to take out $25/paycheck. (Covered expenses include copays and deductibles for medical and dental visits, prescription drug copays, etc.—the patient's share of a bunch of things that are partially covered by insurance—plus over-the-counter drugs, prescription eyeglasses, and some other stuff. The list is determined by the IRS, not by the employer or the company they pay to hire this for them. One thing worth noting about these plans is that if you sign up to have $100/month taken out starting on January 1, you can use that entire $1200 immediately, before it's taken out of your paycheck.
I'd never had an FSA before, so I had to guess how much to put in it. I figured so many prescriptions, so many doctor visits, and if there was anything left over I could get new glasses if it was a lot, or stock up on ibuprofen if it was a few dollars. I did that calculation in March. I didn't count on the gall bladder surgery, of course.
In May, I made what turned out to be a practical mistake, and used the card they sent me to charge a couple of prescription copays against the account. This was a mistake because I did not immediately grab the receipts and send them in to substantiate the expenses. They've been sending me letters, and I've been looking for receipts. Apparently there's no way to send them back the money if you can't find the receipt, it has to be offset against other expenses you can substantiate.
One of the things that is covered is hospitalization. I got the bill from the hospital yesterday, for that part of their bill that the insurer neither covered nor negotiated a discount on. It comes to a little over $1000. That not only is more than I have left in my FSA for 2008, it's more than the total I told them to deduct for the calendar year. So I am faxing them a copy of the hospital bill (or trying to, their fax machine is often slow to answer on weekends), and figure they will send me a check for about a third of it, and I can stop worrying about drugstore and medical copay receipts for 2008, though I may throw a few more in the appropriate folder just in case.
Sometime in the next few months, I will need to guess how much to have taken out next year; this year is not a useful basis for calculation. (I may be a bit less conservative than I was this year, on the theory that new glasses never did me any harm.)
ETA: I got the reimbursement in today's mail (August 16; I faxed the form to them on the tenth). Computers being like that, it states the amount paid out this year, the amount remaining in my account (zero), and the amount of outstanding claims (about $700). I say "Computers being like that" because the outstanding amount cannot be paid: money added in 2009 won't apply. Actually, there might be a way it would be payable: if I changed jobs before the end of the year, and the new job also had an FSA. This is low-probability. So I have put that paperwork in the "FSA" folder, and the check in my wallet.
I'd never had an FSA before, so I had to guess how much to put in it. I figured so many prescriptions, so many doctor visits, and if there was anything left over I could get new glasses if it was a lot, or stock up on ibuprofen if it was a few dollars. I did that calculation in March. I didn't count on the gall bladder surgery, of course.
In May, I made what turned out to be a practical mistake, and used the card they sent me to charge a couple of prescription copays against the account. This was a mistake because I did not immediately grab the receipts and send them in to substantiate the expenses. They've been sending me letters, and I've been looking for receipts. Apparently there's no way to send them back the money if you can't find the receipt, it has to be offset against other expenses you can substantiate.
One of the things that is covered is hospitalization. I got the bill from the hospital yesterday, for that part of their bill that the insurer neither covered nor negotiated a discount on. It comes to a little over $1000. That not only is more than I have left in my FSA for 2008, it's more than the total I told them to deduct for the calendar year. So I am faxing them a copy of the hospital bill (or trying to, their fax machine is often slow to answer on weekends), and figure they will send me a check for about a third of it, and I can stop worrying about drugstore and medical copay receipts for 2008, though I may throw a few more in the appropriate folder just in case.
Sometime in the next few months, I will need to guess how much to have taken out next year; this year is not a useful basis for calculation. (I may be a bit less conservative than I was this year, on the theory that new glasses never did me any harm.)
ETA: I got the reimbursement in today's mail (August 16; I faxed the form to them on the tenth). Computers being like that, it states the amount paid out this year, the amount remaining in my account (zero), and the amount of outstanding claims (about $700). I say "Computers being like that" because the outstanding amount cannot be paid: money added in 2009 won't apply. Actually, there might be a way it would be payable: if I changed jobs before the end of the year, and the new job also had an FSA. This is low-probability. So I have put that paperwork in the "FSA" folder, and the check in my wallet.
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