I first heard about FSAs at work during a benefits meeting. I thought to myself, “why would anyone want to put money away for medical expenses with the possibility you may lose it all if you don’t use it up at the end of the year?”. Well, after learning more about them through my wife, I have come to a different conclusion.
FSAs make sense, because you are able to set aside money for various health care expenses with pretax dollars. This is a great incentive.
Here’s a list of some qualifying expenses:
- Dental care and orthodontics (some limits here)
- Contact lenses
- Laser eye surgery
- Chiropractic care
- Prescription drugs
- Pregnancy test kits
- Band-Aids and over-the-counter medicines like Tylenol and Claritin
(list via Be Thriftyby Catton & Suntree)
If you are unsure about how much to set aside, this calculator provided by Healthzone.com may help.
I say, if you are going to incur these costs anyways during the year, why not take advantage of the FSA?