Flexible Spending Account: takes some planning

Is there any reason to set up a medical flexible spending account if I’m not perfectly sure of my expenses for the year and I don’t expect any major life/work event?


Dear Steady,

You do not need to be perfectly sure about your expenses to set up an Flexible Spending Account (FSA).  You could, for example, put only a small amount in the account and be confident that you will spend at least that much.  You might have co-pays for doctor’s visits, dental care, or prescription drugs.  These can add up to several hundred dollars.  The FSA simply lets you avoid paying taxes on that money.

As for a major life or work event, no one can anticipate all of these.  Yes, you might know that you are unlikely to get married or divorced during the year.  But you might change jobs, become ill or disabled, have an accident, etc.  Certain major events will allow you to change your FSA enrollment (marriage, divorce); others would end your FSA anyway (changing jobs).

In short, if you have any medical expenses that you can plan for, then an FSA can help you save money.  If you have none, then an FSA is not for you.

Linda Riddell

About Linda Riddell

A published author and health policy analyst with 25 years’ experience, Linda Riddell's goal is to alleviate the widespread ailment of not knowing what your health plan can do for you.