open enrollment season is here and throughout this week,
you know that we've continued to tackle different health insurance
options on closing bell. So you 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 their 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 going to 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 a 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 um 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