It’s no secret that health care can be very expensive, even for those fortunate enough to have it offered through their employer. If that’s any surprise to you, it shouldn’t be. After all, just take a look at all the news coverage devoted to a government-run healthcare option. No matter where you fall on the political spectrum, you probably feel at least some part of the healthcare system could use some reform and would probably admit that it can cost a lot for the average person. And while you can cut costs and buy sale scrubs instead of new ones, it’s still hard to cut hundreds of dollars out of your budget to help pay for your health insurance. For those that are lucky enough to have it offered at their employer, medical expense flexible spending accounts can help. But what exactly is this account and what does it do?
A medical expense flexible spending account is used to pay for many things that you use for your health every day but that aren’t fully covered by your health insurance. While every flexible spending account is a little different, commonly covered items are things like ibuprofen, prescription co-pays, bandages, and cold medicine. Even if your insurance pays for your visit to the doctors and nurses in their scrub jackets, a lot of these other costs are things that you’ll likely need. What the flexible spending account allows you to do is pay for them with money that is taken out of your paycheck before taxes are taken out. That isn’t that big of a deal, you might think, but it’s actually a nice cost savings.
When you consider how much of your paycheck goes to taxes, imagine if you were able to take $ 2,000 out of your paycheck before taxes. Depending on what tax bracket you’re in, that can be a considerable amount. And as long as you purchase $ 2,000 of eligible expenses over the course of the year, you’ll get reimbursed for all those expenses. If you’re a nurse, it’s likely that your scrub pants won’t be eligible, but there are a lot of other things that surely are. A very nice thing in recent years is the ease in which you can get reimbursed for your expenses. Some flexible spending plans issue you a debit card that you can make eligible purchases on. Rather than having to save and submit receipts, the back-end account is done automatically for you. What could be easier?