Flex Plans
Company sponsored “Flexible Spending Accounts” or “Cafeteria Plans” offer an affordable way to save money and pay for vision correction procedures with pre-tax dollars. If your company offers health insurance, there’s a good chance they also offer the opportunity to set aside pre-tax dollars that help cover your deductible and other out-of-pocket medical expenses. During “open season” you can elect to set aside a certain dollar amount every pay period to put toward health care costs not covered by health insurance. This money comes out before taxes are taken out, and is set aside in a Flexible Spending Account (FSA) for future use.
Let’s say your procedure will cost $1,500 and you want to take advantage of a FSA. If you get paid every other week, you could elect to set aside $58 every paycheck. However, because the money comes out before taxes are taken out, your paycheck will actually go down by less than $58 dollars a week. The other big advantage of an FSA is that sometimes you don’t have to wait until you’ve saved the full amount to receive the reimbursement. For example, if you start an FSA in January and have your procedure in February, you may be able to request the entire amount from your FSA up front. You will continue making payments into your FSA for the rest of the year. It’s essentially an interest free loan on money you never had to pay taxes on.
The tax-free advantage of these savings plans is quite remarkable. Let’s say your procedure costs $3000. If you pay for it out of pocket, you’ll spend exactly $3000. However, if you use a FSA, you are paying for it with pre-tax money and will save an average of 30 percent. So while you still have to pay $3000, the procedure will actually only cost you $2,100 because you avoided paying $900 in taxes on that income.
Please call us at 1-877-202-0669 for additional information on how you take advantage of these employer-sponsored plans!
