open enrollment season is here and throughout this week,
you know that we've continued to tackle different health insurance options
on closing bells so they can choose the right plan for you
in the year ahead.
Today. We're focusing on the flexible savings account or F. S. A.
Which is an arrangement through your employer that lets you pay
for many out of pocket medical costs with tax free dollars.
So joining me now is Jan Dubowski,
healthcare attorney Jan thanks so much for coming on the show what is and
I'm happy to have you and why should a employ a worker choose an F. S. A.
Versus versus an H. S. A.
Sure. So an F. S. A.
Is a flexible spending account and you have a limited purpose that you can use it for.
It's really intended for you to be able to use those pre tax dollars.
So you get more bang for your buck on qualified medical expenses.
So those are gonna be things like braces, glasses and contacts.
There's a very specific cat category.
So if you've got a kid with braces,
you really want to take a look at a flexible spending account.
You can put up to $3500 in 2023 in that account.
And then if you don't spend it all, you got to be careful. You can only roll over $610.
So make sure you budget out exactly how much you're gonna need.
And then you can use that for your flexible spending account. It's def
than an H. S. A. Because an H. S. A.
Is much broader,
you're going to use that for things like
your deductible or for prescriptions where an F.
S. A. Is really focused on things like braces,
contacts, glasses.
So it sounds like it might be a better option for families jan versus individuals.
It probably varies case to case though. Right.
Exactly. So my son just got contacts and that was almost $700.
And so you sure would like to spend that
on pretax dollars rather than post tax dollars.
So if you know you're gonna get contacts every year
and you're using those dailies and there's 700 bucks,
then you just sign up for $700 for your F.
S. A. Account, you don't have to do the full 3000. So it's it's good for everybody.
So planning ahead really helps. Is there any sort of cushion you should account for?
Obviously if you know you're gonna make some of these big ticket purchases,
it is helpful to plan.
But is there any sort of window? I think that people should prepare for two
sure. You know what you want to be aware of?
Is that recently they started to allow folks to roll money over before it
was if you put 3000 in and you didn't spend a dime of it,
you lost it which was terrible.
So now you can roll over $610. Um Year over year.
So so you want to make sure that you're really thoughtful at the beginning of
the year when you're signing up for it about exactly how much you're gonna spend,
give yourself a little bit of cushion
in case you don't spend quite that much and you can roll over that $610.
Do you think it's wise for people to put money toward an F. S. A. And an H. S. A.
It's absolutely. So what's interesting about an H. S. A.
Is that it doesn't have this rollover problem. You can save money into your H. S. A.
All the way into retirement.
You can take it with you from employer to employer and
then when you retire you can use that money then.
So that's pre tax dollars. It's another way that you can save money for your retired.
So I would put as much money as you can in your H. S. A.
And then if you have these eligible expenses for F. S. A.
I would do that as well because those are really both good benefits.
What do we know about the contribution limits Jan I'm
sure they do rise every year and certainly with inflation
perhaps we might see even some bigger gains in
the contribution limit here in the year ahead.
Right so it was it was raised a few $100 this year. So on an F. S. A. You can put in $3050.
Um And that will go towards all those expenses that we've talked about.
The braces and whatnot.
Um It is interesting the options that are available
to people out there as a health care attorney.
Any other general advice Jan that you would give americans
as they look to navigate the process of open enrollment.
Sure one big piece of advice I have for you as a mom, I have two little girls,
they're five and six years old.
So if anybody's out there with young Children there's
such a thing as a dependent spending account,
dependent flexible spending account and that is absolutely wonderful.
You can use it for if your kids go into summer camps during the summer while while
you're at work for daycare you can put up to $5000 per family pretax in these accounts
that will help you pay for your, your care for your child baby teenager.
You just put that money aside and that's really special.
So that's something that a lot of people don't take advantage of
that I think could really be a big help especially right now.
Alright Jan Damascus Healthcare Attorney Jan thank you so much for joining