Most people these days are looking for ways to save money on healthcare. After all, medical costs have done nothing but go up in recent decades, and many are feeling the squeeze, especially without insurance. Even with insurance, costs can still put a burden on your wallet. Many insurance plans have high deductibles to offset low premiums, and this means that you have to spend a lot out of your own pocket before your insurance benefits kick in.
Flex Spending Accounts May Help
One way that people are combating the rising cost of healthcare is with flexible spending accounts. A flexible spending account definition states that this is an account that is set aside specifically for healthcare expenses. Money placed into a flexible spending account is not taxed until it is spent, if at all, and funds can be used to pay for things like doctor visits and prescription medications.
The downside is that, according to most flexible spending account definition terms, funds that are not used at the end of the year are lost. Unlike a health savings account (HSA), flexible spending account funds do not roll over into the next benefit period.
Sharing Flexible Spending Account Funds
If you have a flexible spending account, you’ll be happy to know that it is possible to share your funds with certain other people. You can use a flexible spending account to pay for medical expenses for a spouse or dependents. These individuals do not have to contribute to your account, nor do they have to be associated with the account provider, such as an employer.
Spending is still regulated by the same rules, however, meaning purchases made using flexible spending account funds are limited to qualifying medical costs. Family members can, however, contribute to a flexible spending account if they choose, meaning you could use your account as a family healthcare account where each person contributes a portion each month. To set this up, you will want to speak with your account provider. Once again, this is usually an employer that sponsors the plan.
Read a similar article about what is a high deductible health plan here at this page.
