Letter Re: Open Enrollment for Many Medical Savings Plans

Dear Mr. Rawles,

Greetings! I saw a blog letter mentioning FSA (Flexible Spending Accounts)-one medical plan that helps the average person. Basically, one’s employer (private, public, etc.) has some amount taken out before taxes and this money is put into a plan with a pre-set amount that must be used by the end of the plan year.

Okay, what many people do not know is that IRS laws allow the following:

Once the plan is started, the full year’s funds are present, even if you have not had that total amount saved up yet. Example: I set the plan to $1,000, and at the start of my plan $20 is taken each paycheck (50 weeks). But, I can start applying the plan immediately for the full $1,000. These funds are used to reimburse co-pays, over the counter drugs, reading glasses, or other prescription and generic [medication] costs.

Here are two important points I found out last summer:

First, the medical supplies reimbursed for by this plan include medical supplies, including Quik-Clot, Celox, (Yep! Even the Quik-clot for nose bleeds). Other first aid supplies (usually not found in the local drug store-but commonly found in survival catalogs) are covered (check with the FSA firm handling the reimbursements first!).

I got lots of Band-Aids, Celox, and Quik-clot this summer.

Oh yes, my former employer admitted (yes, I called both the FSA company and my employer at city hall to confirm), that due to IRS laws, a person can access the entire amount for that year, get reimbursed for all of it, and leave employment before the completion of employee payments are made-and no refund is required from the employee by either the former employer or the FSA company! This may prove useful for many people who have these plans and think that TEOTWAWKI is coming soon. [JWR Adds: But purchasing supplies without the intent to fully fund a FSA would be unconscionable.]

Also, real survival medical supplies can be obtained (again, check with the FSA first!) with the plan covering the expenses. (From your pre-tax dollars, of course!).

Food for thought. – L.F. R.