No matter where you are on life’s journey, you can take advantage of the savings potential of a healthcare FSA and/or dependent care FSA. Dollars you contribute are taken out of your paycheck before tax, which means a $100 purchase would actually cost you over $130 without a medical FSA (based on a 30% tax bracket). Let’s take a look at a few savings examples:
Young, single, and healthy
You’ve maybe just entered the job market and are getting acclimated to the 40-hour work week. While your doctor visits may be limited to an annual checkup, you can still use your FSA funds to pay for any copay on that visit and for annual dental and eye exams.
The recent addition of over-the-counter eligible expenses is also significant, since healthcare consumers of all ages may need to purchase expenses to help with pain relief, headaches, or heartburn. Menstrual products such as tampons, pads, and menstrual sponges are also now eligible. Check out our eligible expense list or use the eligible expense scanner in the Benefits Mobile App to help you determine eligibility of these expenses.
Think of your healthcare FSA like a discount on healthcare expenses at stores such as Amazon, Target, CVS, Walmart, Walgreens and more. Dollars you contribute are taken out of your paycheck before tax, which means a $100 purchase would actually cost you over $120 without a medical FSA (based on a 20% tax bracket).
Married with children
Let’s say you’re married and have two children. That means physicals, doctor’s visits, dental appointments, and eye exams for four people. That might also mean two kids who experience bumps and bruises, sports-related injuries, or just need shots. Your healthcare FSA can cover the copay for any of these visits.
A dependent care FSA is also a valuable savings tool. Dependent care FSA funds can be used to pay for childcare for children under age 13 when they’re claimed as qualifying dependents.
Let’s say you enroll and contribute the $5,000 per year into a dependent care FSA (which is the maximum allowed by the IRS) and you pay a tax rate of 30%. By putting that money aside before paying taxes on it rather than allowing the funds to be taxed, you’d save nearly $1,500 for the year!
As you get older, your healthcare needs are expected to increase. You can use your healthcare FSA dollars for copays and a variety of the over-the-counter expenses.
While you may no longer have childcare needs, you can participate in a dependent care FSA to save on care costs for a disabled spouse or dependent of any age.