Time for that health spending spree
TEXT OF STORY
TESS VIGELAND: All right, so there’s one bit of end-of-year financial planning. You’re also running out of time to get everything you can out of your health care benefits — including those Flexible Spending Accounts that will reset on January 1. So this is your opportunity to:
A. Squeeze every dime you can out of what you’ve set aside or B. Leave money on the table. Joel Rose reports.
Joel Rose: David Bagby expected to be a lot sicker this year. Since January, he’s put $1,700 in a tax-free Flexible Spending Account to pay for his health care. That’s money he can draw on to cover out-of-pocket medical expenses.
David Bagby: I think I just over-filled it. I’ve used maybe $200 of it this year. It’s a good problem to have.
Good, because Bagby hasn’t had to see his doctor much. Not so good, because if Bagby doesn’t spend the $1,500 dollars left in his account by the end of the year, he’ll lose it. So he’s been taking stock. He hasn’t bought new glasses in a while. And he could use a spare pair of orthotic inserts for his shoes.
Bagby: I will probably end up spending more on say, shoes, eye glasses, maybe I’ll try contacts this year. If I weren’t going to lose the money, I would not have spent that much.
There are lots of David Bagbys out there. They overestimated their medical expenses for the year. And now they’re trying to use their Flexible Spending Accounts for everything from dental work to Advil before the year ends — or in some cases, before spring, depending on the plan.
Nick LaMotte is president of Integrated Benefit Services, a Pennsylvania firm that manages benefit plans.
Nick LaMotte: If you’ve misestimated it, you’re going to be scrambling around trying to use it at the end of the year on those things that may or may not be necessary.
Those things cover a long list of reimbursable expenses, from certain doctor visits to over-the-counter medication. Spending what’s left in your FSA is just one way to cash in on your benefits before the end of the year. Many insurance plans cover annual procedures at no cost, like a yearly physical. Dental plans typically include two cleanings a year. Vision plans usually offer one eye exam. This may also be the right time to do now what you might have put off until tomorrow
Lani Frank: Once we’ve met our deductible, now the issue becomes “What other services do we want to take care of by the end of the year?”
Lani Frank lives in the suburbs of Philadelphia. Her family’s health plan has an annual deductible of $5,000, which they reached several months ago. At this point, their insurance is reimbursing them 100 percent for many tests and procedures.
Frank: We’re looking at end of the year annual physicals, and maybe gynecological exams, mammography, things of that nature.
Those are things Frank might not have done otherwise. For others, the end-of-year deadline is a reason to do things a little bit sooner than they planned to.
Judy Berlfein: That’s me. We literally were at the doctor when you called the first time.
Judy Berlfein is a medical writer in Encinitas, Calif. Berlfein and her husband recently turned 50, so they ‘re both due for a colonoscopy. Last year, they decided to skip it. But this year, Berlfein and her family have already reached their $7,000 deductible.
Berlfein: There isn’t anything that we’re doing that we wouldn’t do otherwise. But it was a little bit of a motivation to do it this year. Thinking, after 12/31, we’re going to have to pay for it out of our own pockets, so let’s just do it.
Berlfein says she’s glad to be saving the money, although this isn’t exactly her idea of fun.
I’m Joel Rose, for Marketplace Money.
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