Pros and Cons of Medical Flex Accounts
Let’s face it…unfortunately most of us have medical bills. If you don’t have them right now, you, your child or your partner likely will at some point. Medical bills can be scary because when you receive the paper bill, they ask for the whole balance right away. If you can’t afford to pay the entire balance, the first thing to do is call your medical provider right away to set up payment arrangements. However, you can prepare for medical bills a different way if your insurance provider offers Flexible Spending Accounts or FSAs.
An FSA is great if you have a good idea what you spend each year on medical expenses. Start by adding up your out-of-pocket expenses from the previous year. That would be the amount you’d want set aside in your FSA for the year. Any amount taken out of your paycheck for your FSA would be pretax, saving you money. Then, every time you go to the doctor or possibly even pick up a prescription, you’ll get that money from your FSA to go toward those medical appointments or prescription expenses.
This is a great way to plan for medical expenses, and the money in your FSA is available right away to pay off your medical bills. Please note: always read up on the specific details of your plan first.
For more information about to how prepare for unexpected medical expenses. read out blog, "How to Prepare for Unexpected Medical Costs."