Tuesday, December 16

It's not too late: Sign up for Flex Money!

Tax free money. Happy sigh.

Yes I'm a Democrat but I still enjoy tax free earnings!

Most employers offer medical flex accounts which shouldn't be ignored! Basically you guess how much money you will spend out of pocket on medical expenses for the following year and the amount you elect is saved in a medical account for you tax-free. "Medical expenses" is broad and includes products such as contact lens solution (although CVS recently offered contact solution as its free product two weeks in a row so no one should need contact lens solution for another year or two).

Anyway you spend for co-pays or allergy medications or prescription drugs or lasik and then mail your receipts into the flex company and they'll send you a check back!

While overestimating leads to potentially losing the money at the end of the year, there is a grace period that allows you to continue spending your flex money for the first few months of the following year. Plus you can always stock up on pharmacy products if you overshoot by too much.

I know a lot of people who wait until December to mail in all their receipts at once. I wouldn't recommend this. First of all, if you request the money as soon as you spend it you can make interest off of the $$. Second, you never know when they will reject what you feel is a valid medical product so it's better to know what you'll get reimbursed for sooner than later.

One last important piece of info- the minimum amount you need to put in your flex account varies based on your organization's plan but can be around $240 for the year and the max is $5,000. Hopefully you keep all your expenses in a budget so you actually know what you spent on medical products and services in 2008 to help you predict for 2009!

Send questions to funandfrugal20s@gmail.com.

1 comment:

Allison Redisch said...

Actually, I think the minimum amount varies by employer, so you may want to check on that.