Demystifying Flexible Spending Plans.

Also called a flex plan or reimbursement account, a FSA is an employer-sponsored benefit that allows you to pay for eligible expenses on a pre-tax basis. Eligible expenses include medical expenses not covered by your current health insurance such as deductibles, office visits, etc; as well as child or dependent care expenses. If you employer offers this plan and you anticipate incurring any of these expenses you should be taking advantage of this valuable benefit.

How does a Flexible Spending Plan benefit me?

Contributions made to your FSA are deducted from your pay before your Federal, State, and Social Security Taxes are deducted which means they are not reported to the IRS. This results in your taxable income decreasing while your spendable income is increased. You could potentially save hundreds or thousands of dollars by participating in the plan.

How does an FSA Work?

If you are planning on taking advantage of this valuable benefit from your employer, they will ask you at the beginning of the plan year (usually January 1^st) how much you would like to contribute for the year. There are limits for both medical and dependent care plans so you will have a guideline regarding how much you are allowed to contribute. Once you determine how much you are contributing you can expect to see equal deductions taken from your paycheck each pay period for the plan year. That money is set aside in an account by your employer for reimbursement throughout the year as you pay for medical or dependent costs not covered elsewhere.

When determining how much you would like to contribute for the year you should take a close look at your previous medical or dependent care needs. Some people think by contributing the maximum amount they are safe, however this benefit is a use-it-or-lose-it type of benefit. If at the end of the plan year you have not used all the money that you have had deducted you will have to forfeit the remaining amount. Individual companies set the limit for medical care accounts, while dependent care accounts have a strict Federal limit of $5,000 per family. That means if each parent participates in a FSA plan the limit for BOTH persons cannot exceed $5,000 combined.

In a time where many families are struggling to get by, it is imperative to understand benefits available to you at your workplace. If you have any questions about what type of benefits are available to you or how they work, make the effort to contact your human resources department to get a better understanding how these benefits can help you and your family.

Are You Getting The Most From Your Employee Benefits? was created by and is property of American Consumer News.

Many people consider their pets to be a member of the family. In that regard, pets are often spoiled and enjoy the same comforts as their human counterparts. Pet owners have been known to take it to the extreme in some cases. We’ve already read a story or two about the billionaire who left everything to Fluffy the cat or the millionaire dog that now lives alone in a palatial estate. I used to think people who purchased pet insurance were in the same category. However, realistically those who are willing to do whatever it takes to make sure their pet is healthy, may find pet insurance a good policy to have if they otherwise could not afford a large bill in emergency situations. It is relatively inexpensive, costing on average between $15 and $28 a month, depending on the type, age, and breed of the animal. Coverage is generally divided between basic and premium.

When shopping for a plan, you should pay attention to what it will cover, such as which illnesses, injuries, and treatment options are included in the plan. Pre-existing conditions are usually not covered. Most plans will carry a deductible of $50 or more and require a co-payment. Typically, most plans will obligate you to pay the amount in full at the time of service and then file a claim for which you will be reimbursed at a later time. Owners, who wish to insure more than one pet, may be able to get a discount on the insurance plan.  There also may be discounted programs available through animal-related organizations.

Purchasing insurance for your pet is really no different than buying it for yourself or your family. You need to shop around and compare plan benefits to get the best policy for you. Make sure the monthly premium payments are within your budget and before signing any agreements, be sure the company is legitimate and you are confident you are clear on what benefits are included.

Insurance Is For The Birds…and Other Pets was created by and is property of American Consumer News.