HSA, Limited FSA Question (1 Viewer)

As some of you might have read, I was laid off from my job a few weeks ago.

Other thread.

http://forums.footballguys.com/forum/index.php?showtopic=719785&hl=

Since my final end date at the company is January 31st, I still need to select my benefits for next year even though they will be ending on January 31st.

I have a High Deductible Health Insurance plan in which I have an HSA which I use to pay for expenses. I also have the option to have a limited FSA that I can use for Dental/Eyeglass wear etc. I have never previously used the FSA since I have had the HSA and it was just easier to just use one.

The FSA is use it or lose it. If I didn't use the funds at the end of the year I would lose them while the HSA is just an account that rolls into the next year and forward.

Reading through the material, I understand that if I elect to have an FSA, for example for $520, it will cost me $10 a week to fund it, but I will have access to the whole $520 on Jan 1. If I do this, since my employment will end on Jan 31st, I will end up making 3 bi weekly payments of $20 for a total of $60, but will have the benefit to use of $520. I can use this for Dental Appointments, Eyeglasses etc.

Does this sound correct? The maximum contribution is $2500, which technically would only cost me ~$300. I don't think I could send all that in January, but I could definitely use some of this.

Looking for opinions if this would work.

Thanks

Yes, I benefited from this the same way but it was over 10 years ago so the rules may have changed. I paid thru April but was able to submit claims for the full annual amount. Mine was for any out of pocket medical expenses. I don't recall if the expense dates could be anytime during the year or had to be during the period of employment. I didn't know in advance like you otherwise I would have elected a much larger amount or possibly maxed it out.

rick6668 said:

Reading through the material, I understand that if I elect to have an FSA, for example for $520, it will cost me $10 a week to fund it, but I will have access to the whole $520 on Jan 1. If I do this, since my employment will end on Jan 31st, I will end up making 3 bi weekly payments of $20 for a total of $60, but will have the benefit to use of $520. I can use this for Dental Appointments, Eyeglasses etc.

Does this sound correct?

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Pre-funding and risks incurred by the employee and employer

One consideration regarding medical FSAs is that the participating employee's entire annual contribution is available at the start of the plan year, commonly January 1, or after the first contribution to the FSA is received by the FSA vendor, depending on the plan... If the employee is terminated, quits, or is unable to return to work, he or she does not have to repay the money to the employer.

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Not true. Your employer will come after you to get that money back. At least ours does.

NetnautX said:

Not true. Your employer will come after you to get that money back. At least ours does.

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Come after you? It seems if they wanted to, they could just deduct it from your final check.

NetnautX said:

Not true. Your employer will come after you to get that money back. At least ours does.

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Not according to the law.http://www.irs.gov/pub/irs-wd/1012060.pdf

Ignoramus said:

NetnautX said:

Not true. Your employer will come after you to get that money back. At least ours does.

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Not according to the law.http://www.irs.gov/pub/irs-wd/1012060.pdf

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Thanks, going for 10/week for $520, should be able to use most of it.

On an FSA, can one use it for expenses incurred by someone NOT on your insurance? Say I am taking care of my nephew and he needs stitches or something. Can I use my FSA funds to pay his bill?

The Commish said:

On an FSA, can one use it for expenses incurred by someone NOT on your insurance? Say I am taking care of my nephew and he needs stitches or something. Can I use my FSA funds to pay his bill?

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Yes if you claim him as a dependent on your tax return or if you provide at least half the cost of his annual support needs.

Bucks said:

The Commish said:

On an FSA, can one use it for expenses incurred by someone NOT on your insurance? Say I am taking care of my nephew and he needs stitches or something. Can I use my FSA funds to pay his bill?

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Yes if you claim him as a dependent on your tax return or if you provide at least half the cost of his annual support needs.

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Was just reading about this. I think I get it now. It's essentially limited to family members outside a couple edge cases like you outline here. If my son and wife are on one insurance and my daughter and I are on a different insurance, I could still use my monies on my wife/son though, correct?

Cjw_55106 said:

NetnautX said:

Not true. Your employer will come after you to get that money back. At least ours does.

Click to expand...

Come after you? It seems if they wanted to, they could just deduct it from your final check.

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Pretty much.

Ignoramus said:

NetnautX said:

Not true. Your employer will come after you to get that money back. At least ours does.

Click to expand...

Not according to the law.http://www.irs.gov/pub/irs-wd/1012060.pdf

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Huh. Color me wrong then. I could have sworn this came up a couple years ago and it was communicated that reimbursement was to be collected where i work.

So I guess if you are going to get your eyes lasered or something and you are leaving your employer in a month you night as well max it out and have them pay for it.