Migraine-Related Expenses & Flexible Savings Accounts
The health flexible spending arrangements (also known as flexible spending accounts) offered by some employers can be helpful. These accounts allow you to get more for the money you spend on health care expenses and may also assist you in budgeting for the predictable expenses related to living with migraines.
Flexible spending accounts (FSA) are benefit programs established by employers. They allow employees to set aside money to pay for qualified health expenses. This money is not taxed by the federal government. Some employers also contribute money to these accounts.
You can use an FSA to set aside money for prescription copays, out of pocket prescription costs, doctor’s appointment copays and other similar expenses. However, you cannot use money from an FSA to pay for insurance plan premiums, long term care coverage or expenses or costs covered by another health plan. It will be harder to use money from an FSA to pay for over the counter medications in the future because of restrictions imposed by the Affordable Care Act of 2010, but using an FSA for these has always been subject to confusing, restrictive rules. After January 1, 2011, you will need a doctor’s prescription to use your FSA for over the counter medications and items. If you think you’ll want to use your FSA for these contact your doctor sooner rather than later to find out if you’ll need to come in for an appointment or if you can get the prescription by mail, email or fax instead.
If you decide to set up an FSA through your employer you must decide how much you want to set aside for the entire year at the beginning of the plan year. Look at how much you spent out of your own pocket the year before and consider setting aside a similar amount by having a portion taken out of each paycheck. For example, if you have a prescription for Sumatriptan (generic for Imitrex) filled every month and your copay is $35, you might want to set aside $420 to pay for that expense (12 x 35 = 420). If you see your primary care doctor once a month and pay a $20 copay, you might want to put $240 in your FSA for that expense (12 x 20 = 240). If you see your neurologist every three months and have a $50 copay, you could put $200 in your FSA to cover those copays (4 x 50 = 200). If you are a migraineur who has to pay extremely high copays for your treatment or preventive medications, using an FSA will be even more helpful to you.
In addition to not being taxed on the money in your FSA, you can access all the money you will contribute that year before it has actually been added to your account. Unfortunately you are required to spend all the money in your account by the end of the plan year or lose it. Some people will order new glasses or contacts near the end of the plan year if they have a significant balance in an FSA and fear they will not be able to spend all of it in time. Some plans do have a grace period to allow you to spend the money in your FSA even after the plan year has ended, but planning ahead is key.
Some plans ask you to submit paperwork to be reimbursed for your costs, while others issue you a credit or debit card to use. Having to send in paperwork for reimbursement isn’t especially convenient, but that little bit of extra work can be worthwhile considering that you’re not subject to taxes on the money in your FSA. Once you’ve completed the paperwork a couple of times it becomes a much easier, faster process. How much you will save depends on your income, tax bracket and how much money you allocate to your FSA, but in these difficult economic times we can all appreciate keeping more of our earnings.
If you think an FSA might be a good option for you the best thing to do is to carefully read through the information about your plan. Then ask lots of questions before you decide how to incorporate an FSA into your medical and financial plan for the upcoming year.
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