Having A Flexible Spending Account

We have health insurance and always have. We pay for it through my husband’s job and, let me be clear, I am TOTALLY OKAY WITH THIS. I could go on and on about the reasons I’ve been glad to have it, but instead I’ll just give you the biggest one–

When our daughter was born at 24 weeks gestation and stayed in the hospital for 3 1/2 months, the bill was over 750k. That’s right. Over three quarters of a MILLION dollars. More than the cost of all three homes we’ve owned combined. Yikes. Our portion? $250. Total. That was it. So, yes, premiums can be costly. But in the grand scheme of things? Still worth it.

All that being said, we still have to pay for health-related things of course… co-pays, deductibles, prescription co-payments, over the counter medications, my contacts, etc., etc. A couple years ago, my husband and I sat down and looked seriously at setting up a flexible spending account (FSA) to put aside money for these costs pre-tax. We crunched some numbers and figured out how much we KNEW we would spend and elected to have that amount pulled out monthly, before taxes, from my husband’s paycheck.

The end result?

We really didn’t miss it. It didn’t really feel like his paycheck “shrank”, per se. But when we had to pay up for something “medical”, we had a debit-type card with money already set aside for that purpose. Easy and painless. We no longer had those pesky $15 co-payments popping up at odd times and throwing the budget off-kilter. It really worked for us!

The bonus? When my husband’s position was suddenly eliminated only a couple months into the year, we were informed that the FSA is fully funded at the start of a new year by the company. So, essentially, even though WE had only “paid into” the account for two months, the full year’s allotment was in there. And we were perfectly free to use it all before his position ran out.

Yet another thing to be grateful for!

Having an FSA has paid off for our family. It definitely Works For Me!

How about you? Does your family have an FSA? Has it been helpful or a burden? What questions do you have about FSA’s? I’ll try to answer them in the comments!

To see more things that are “working”, check out Works For Me Wednesday, hosted at We Are THAT Family.

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