Did you know that Americans lose an average of 14 percent of the money they invest into flexible spending accounts every year?
Some research has shown why people don’t use all of their health benefits before losing them — they simply don’t understand their benefits, or they forget. Here’s a few numbers to illustrate my point:
- A recent study showed that 77 percent of people make mistakes when signing up for their benefits during open enrollment, and it usually costs them money.
- Only 4 percent of respondents correctly identified all four of these basic insurance terms: deductibles, copay, coinsurance, and out-of-pocket maximums.
- Americans spend less than 30 minutes per year researching their health and dental benefits, a task less appealing to most people than cleaning or doing taxes.
- 38 percent would rather spend the time cleaning out their email inbox.
- 23 percent would rather clean their toilet.
- 18 percent would rather do their taxes.
If you don’t understand how your health benefits work or what they cover, it will be hard to use them properly. A lot of Flower Mound residents don’t realize they can use their FSA dollars for dental expenses for themselves and their children, causing them to forfeit some of the money they’d been putting away all year.
How do Flexible Spending Accounts work?
Flexible spending accounts let you contribute money to an account to use on health-related services that aren’t covered by your regular health plan. This includes regular out-of-pocket expenses such as deductibles or copays, as well as many dentistry services such as cleaning, sealants, or x-rays.
Not only is a separate account a good way to make sure the money is there when you need it, it also comes with some serious tax benefits. FSA contributions are tax-free, so both employers and employees love them. Routine expenses and dental care now reduce your tax liability!
It’s a good idea to use tax-free money to pay for dental care, because doing so may reduce your actual overall costs by as much as 40 percent.
Individual plans may vary, but most FSA’s can be used for:
- Tooth extraction
- Sports mouthguards
- All diagnostic or preventive treatment
Use your benefits before you lose them
As great as FSA’s can be, they have one major drawback — if you don’t use your benefits before the end of the plan year, you could lose your unspent money!
Poof. Right out of the window. Gone.
Some plans may allow you to carry over up to $550 into the new yearf, but eventually, unused funds are forfeit. I don’t like to see Flower Mound families lose their hard-earned income, so if your family is due for cleanings or dental work, schedule soon!
Time’s getting short, and there is typically a rush at year’s end (for just this reason), so make sure you don’t miss out. And if you’re still unclear about what your FSA covers, stop by our dental practice and our team will be more than happy to help answer any questions you may have!
Helping kids love dentistry!
~Dr. Debra Duffy