Some provisions of the new health care law will impact everyone

The passage of the Patient Protection and Affordable Care Act this past Mach means that some additional changes will be made to health plan offerings that may impact your health care budget.  One, a favorite of mine, is the wide variety of uses for Flexible Spending and Health Savings Account funds.  From a post I wrote previously, I outlined the advantages and disadvantages of these accounts.  However, regardless of what type in which you may contribute, beginning in January 2011, the eligible usage of these funds won't be as broad as in the past.

From the revised IRS guidelines, FSAs and HSAs funds will no longer be eligible for purchasing certain over-the-counter medicines and remedies.  Instead, consumers will largely only be able to use these funds for prescriptions, co-pays, and other eligible medical-related purchases.  It's a bummer, as even cold medication was covered previously.  More so, pharmacies may fill a bit of a pinch as well on these changes.  Whereas in the past a consumer may be more willing to buy a remedy for a cold, as an example, rather than wait it out, now, without being able to use pre-tax dollars for medications, this restriction may just discourage some from seeking treatment.

With open enrollment around the corner, keep in mind that your ability to use FSAs/HSAs may be more limited than in the past, thus, don't "over-fund" your contributions.  Try to estimate your co-pays and prescription drug needs as accurately as possible to prevent wasting money.

How To Take Advantage Of Open Benefits Enrollment

Just a reminder that it might be the time (only twice a year, unless a major life event happens) for you to review your health care and other benefits.  This year, a growing theme is more consumer driven health plans, that is you, the consumer, taking more control of your health care costs vice your employer.  We all know that the subject of health care coverage is a major headache, and in debate in Congress.  Until that is sorted out, you can do a few things to lower your costs:

1) If you are using a traditional plan, that costs more per month, but has lower out of pocket costs, be sure to take advantage of the Flexible Spending Account (FSA) option.  These allow you to set aside pre-tax dollars for expenses like doctor's co-pays, contact lenses, and other other IRS-approved items. 

2) Consider a high (er) deductible health care plan that comes with a Health Savings or Health Reimbursement Account.  These are designed for you to pay lower premiums monthly, but face a higher threshold of cost in the event that you have medical needs beyond the routine.  Good thing is that many plans still cover preventative care visits- gratis.  Look for a Health Savings Account (HSA) plan among your options.  The difference is that the Health Reimbursement Account (HRA) belongs to your employer (because ideally they are contributing along with you to offset health care costs) and must be sacrificed when you leave your firm, although it still grows year by year, just like the Health Savings Account.  The Health Savings Account is portable, meaning, you can take it with you, and it grows year to year as well. And, hopefully your employer is contributing to that as well.  It saves them money.  You can contribute pre-tax dollars as well, up to statutory limits, which vary by age.

For more information on these alternative plans, especially about the types of medical costs that can be covered with HSAs, HRAs, and FSAs, visit the IRS.  (It's a surprisingly straightforward document and worth a look.)


Bottom line: carefully research your options and don't just take your default choice out of laziness.  There's money to be saved.  Ask your company's HR practitioner for help, too.  Some plans are clearly better for than others.

How To Take Full Advantage Of Your Company Benefits

Hidden in all your corporate benefits packages, if you are lucky to have good ones, are a lot of possibly little known discounts.  A lot of people have head of flexible spending accounts which allow you to set aside pre-tax dollars to pay for medical expenses, devices, and more.  For example, you can go to your favorite drug store and buy something as basic as band aids with your flexible spending account debit card and buy them with pre-tax dollars.  Extra savings tip, since your FSA account is limited to what you contribute, maximize its usage by utilizing coupons.  Yes, you can use coupons in conjunction with your FSA card and essentially get an additional discount off these types of items.  You can even use your FSA account for on-line shopping, such as at drugstore.com.  When searching for items, look for an FSA-approved label.

In addition to health care savings, you might also be able to take advantage of discounted wireless services.  My old company had a deal with Verizon where I could get 7% off the bill every month.  Again, that's money just sitting there for you.

I encourage you to review your company's benefits brochure or website, or speak with your HR contact.  You might be surprised at what you can get.  Gym memberships are another common discounted benefit for employees.