Healthcare flex funds, which are kept in a flexible spending account (FSA), are a fabulous option for making eye care payments. Though 87 percent of companies with more than 500 employees offer an FSA option, a meager 21 percent of employees actually sign up.1 Why? As it turns out, many people simply don’t understand the option, just like many people struggle to understand run-of-the-mill employer health insurance.
If you’ve signed up for an FSA, you’re in luck – FSA dollars can be used to pay for many valuable eye procedures. If you haven’t yet, you may want to consider signing up for next year. Read on to learn more about how an FSA can help you take care of your eye health.
What Is an FSA?
Simply put, an FSA is a way for employees to set aside pre-tax earnings to go toward eligible health expenses. An FSA can only be established through your employer, but you do not necessarily need to be signed up for health insurance to have access to an FSA. The years’ funds will be available as soon as you make your first contribution.
Because less of your income will be taxable, many people who are going to spend money on healthcare anyways find the FSA to be a worthwhile investment. Your employer may even contribute to your account, which is essentially free money. You can even pull from your funds to pay for a spouse, child or dependent’s healthcare.
The Limitations of an FSA
There are certainly many positive reasons to enroll in an FSA. However, there are several significant limitations you should know before signing up.
Use it or lose it
– The biggest drawback of an FSA is you must utilize the funds by the end of the year or they disappear for good! Employers can choose to allow a little wiggle room on this policy by opting for one of two extensions. Option one is offering a grace period of two and a half months, which effectively lets employees hold onto their funds until mid-March. Option two is letting employees carry $500 over to the next year’s FSA funds.
As you can imagine, there is a bit of a mad dash at the end of the year for employees to use their remaining FSA funds. Many choose to get procedures they might normally put on the back burner, such as laser eye surgery.
– $2,600 is the maximum annual payroll deduction an employee can allocate to their FSA. Although it’s not necessarily common, employers could potentially match the full amount the employee contributes.
Keep in mind that an FSA, or flexible spending account, is different than an HSA, or health savings account. With an HSA:
- Your money carries over from year to year
- You need to have a high deductible health plan to be eligible
- You can deduct a larger amount of money from payroll
Expenses an FSA Covers
An FSA covers more medical expenses than you might initially expect. Notably, FSA funds cannot be used to pay for insurance premiums and unprescribed over-the-counter (OTC) medications. A full list of generally permitted expenses is available on the IRS website.2 You can use your FSA to pay for the following:
- Eye surgery, including laser eye surgery and LASIK
- Prescription glasses and sunglasses
- Contact lenses
- Contact solution and cleaner
- Eye exams
- Visits to an ophthalmologist
- Vision co-insurance, copayments, and deductibles
- OTC eye care products and medication (only with a doctor’s prescription)
The Lowdown on LASIK
You may have noticed that LASIK is on the list of eligible procedures. LASIK may be a great solution for people who have nearsightedness, farsightedness or astigmatism. During the LASIK procedure, a surgeon uses an excimer laser to reshape the cornea so light will be refracted at the correct angle toward your retina. This procedure may improve your vision considerably.
LASIK is an extremely popular choice for people with unspent FSA funds at the end of the year. People who are relying solely on their health insurance may be disappointed to learn most health insurance companies consider LASIK to be an elective surgery. One of the main benefits of an FSA is the ability to spend these pre-tax dollars on procedures your health insurance may not cover, like LASIK.
With an out-of-pocket cost of a couple thousand dollars per eye, an FSA can save you significant hits to your savings account or expensive medical loans.
Care for Your Eyes with the Physicians and Surgeons at Edina Eye
If you know that you’re due for an eye appointment or feel you would benefit from glasses, contacts or eye surgery, you can use your FSA funds at Edina Eye. Our highly experienced physicians and surgeons always strive to provide the most advanced technology while still prioritizing patient comfort.
Edina Eye offers a wide range of services that may be FSA eligible, including LASIK vision correction, eye exams, cataract surgery, contact lenses, prescription glasses and much more. Call 952-832-8100 today to schedule an appointment at one of our eight convenient locations.