Saving Money on Health Care. Plus, a Video Blog Question for You.

But when we did, we funded the maximum amount. That was because we knew our daughter would need braces that year, though.

Now that we no longer have an FSA, I keep receipts, in case we have a major medical expense that would cause us to have enough money spent on medical expenses to take a deduction at tax time.

I also make sure my family practices good preventive care, and we always ask for generic prescriptions and get them filled under the $4 prescription program at Walmart or Target.

-Lynnae

I'm in the middle of a series of posts on choosing benefits myself (ok, an admittedly boring series of posts, but at least there are a few tidbits of good info in there!), and the flexible spending account is one of my favorites.

What I do every year is take a look at what we spent last year, what I think we'll spend this year (for example, Son's asthma is really improving so I expect we'll have fewer doctor visits and prescriptions to fill next year), I pad it a little, then deduct about 10 percent. I don't worry about overage too much because there is a 2 month grace period you can apply for, and I can always buy more contact lenses and over-the-counter medications at the end of the year ( I don't submit my over-the-counter medications throughout the year, as they don't amount to much).

So far I've been pretty close to dead-on. For 2008 we deposited $900, and we'll likely do about that amount again.

Because you're having a baby in 2009 that really adds some other wrinkles to your decision-making.

You can't really decide how much to put into your FSA until after you choose which medical plan you're taking. Because you are having a baby this year you'll definitely have more out of pocket spending. What you really need to look at is your maximum out-of-pocket spending under each plan because having a baby under a PPO often means meeting your out-of-pocket maximum for the year, especially if there are (G-d forbid) complications or you wind up needing a Cesarean Section (both of which happened to me). If you haven't already, speak to your OB and the hospital about what your expenses will be, and that will help you formulate what childbirth is going to bring for medical expenses next year. If it looks likely that you're going to meed that out-of-pocket maximum then I'd take the plan with the least expensive premiums.

Remember, too, that you can change your medical elections for all three of you once the baby arrives.

You then need to figure what you think your other medical expenses for the year will bring, and factor all of that into your FSA election amount (which cannot be changed even when the baby arrives).

Good luck!

My wife and I are going for the preferred plan, which has the higher monthly cost, but no deductible. The copay is the same between both plans. So, it came down to less hassle and paperwork by avoiding the deductible payments.

~ Patrick

Whatup PT Money!

To answer your questions, my contributions into Flex Spending change every year depending upon our expectations. They range from 500 – 1,500. This year our contribution is going to be 1,000.

My advice for you is to put more money into Flex Spending this year, as you guys are going to have a baby and will need to account for hospitalization, doctor’s visits, and other expenses. Good luck and I’ll keep voting for you!

I put $500 annually in the FSA, for myself and my daughter.

I put $400 into the flex account because I don't plan on having much medical bills this year. (I hope!)

Hey PT - So I went though the same thing a few years back and with kids, obviously you need to dig in a little deeper... Additionally, each plan is different for each company too, so it can get confusing. The big benefit to my PREFERRED PPO was that you could use out of network doctors. So specialists if you need treatments outside the standard (acupuncture for one comes to mind). And the cost of it was close to 30 dollars more a month for us. We didn't have a need for that.

The Flexible Spending one is tough because then you're planning out how much you plan on spending over the year and set it to come out of your paycheck. I couldn't wrap my head around that enough because who knows what kids will be getting into in the coming years...

So I've kept the standard PPO for the past 6 years and it's gone well. The kids are now 3 and 4 and the $10 co-pay doesn't kill us each time.

The Flexible Spending may save you a few bucks over the year if you can plan it out, so kudos to you if you can, but not in my realm!

Good luck!
hank