What is an FSA?
A Medical Flexible Spending Account (Med-FSA) is a benefit that allows you to set aside pre-tax money for eligible health care expenses (e.g. medical, dental, vision care, etc.). The contributions you make to a Med-FSA are deducted from your pay before federal, state, or social security taxes are calculated.
By decreasing your taxable income, you can expect up to 30% on healthcare care expenses. A Med-FSA is especially beneficial for procedures that aren’t typically covered by medical insurance (such as LASIK, cosmetic surgery, or Laser-Assisted Cataract Surgery).
How Do I Take Advantage of an FSA?
You can enroll in a Med-FSA during your employer’s annual Open Enrollment period for the following year. This is usually in June or November. Only those that experience a family status change can enroll or make changes to elections in the middle of the year. If currently enrolled and wanting to continue your Med-FSA benefit for the following year, you MUST make a new election each Open Enrollment.
Your employer will ask you how much you would like to allocate toward your FSA (up to $2,500). This money can be used during the course of the next year to pay for eligible expenses like LASIK. For example, you can save as much as $1,000 in tax from using your FSA for a LASIK procedure, bringing the total cost down to about $4,300.
Remember: not all of your FSA funds will carry over to the next year. Up to $500 can be carried over, so use it or lose it!
HSA and Laser Eye Surgery
You can also use your Health Savings Account, or HSA, to pay for laser eye surgeries like LASIK and cataract surgery.
An HSA is similar to an FSA, except that the funds in an HSA roll over year to year and accumulate. HSA funds are not subject to federal income tax and can be used to pay for qualified medical expenses.