Many companies hold open enrollment for benefits around this time of year. In addition to evaluating health care plans and other perks, it’s the time that employers with flexible spending accounts offer the program.

For those who don’t use flexible spending accounts, they are a benefit offered by some employers that allows you to set aside some money each year pre-tax to pay for qualified medical expenses, including some over the counter items.

I always set aside a small sum for co-pays, prescriptions, you name it. And I reduced that amount this year because in the past I overestimated our expenses. Aren’t kids supposed to increase your medical visits?

One year, I bought a lot of band aids, aspirin and that cold medicine that was recently recalled for infants. Need a band aid? A first aid kit? I have several for you.

This year, we’ve fortunately spent even less on health care than the year before. That’s good because it means we’re healthy (knock on wood for me, there’s none in my cubicle). But that means we have more money in our flexible spending account than I figured. It makes me wonder if next year I’ll put any money aside, although if I don’t you know I’ll wish I did.

The IRS recently revised rules so that money you don’t spend can be used during a 2.5 month grace period. But last time I checked, this was not required, meaning your company could, but doesn’t have to offer the extension. The idea of the grace period was to alleviate people’s fears that they might end up with too much money and have to buy tons of band aids or forfeit their cash. Guess my experience won’t help those of you on the fence.

But they can be great accounts. I’m certainly never in danger of failing to bleed the dependent care flex spending account dry. The total a married couple can set aside pre-tax for daycare is $5,000. I could use four times as much, Uncle Sam.

Perhaps the most frustrating part of flex spending is the lack of comprehensive info out there. HR can give you handouts from the company they work with to administer the plans. The IRS has some information, mainly about dependent care.

I’ve found FSAFeds.com to be extremely helpful.

Any tips on open enrollment?

This entry was posted on Thursday, October 18th, 2007 at 11:40 am and is filed under taxes, work. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.