Flexible Spending Accounts (FSA) and LASIK

FSA Lasik

Many company health insurance policies include an optional Flexible Spending Account, known as an FSA. This is a tax-advantaged financial savings plan which must be operated through your employer. Commonly they are solely for medical expenses such as preventative tests and scans, cosmetic surgery, acupuncture, dental expenses, over-the-counter and prescriptive medications, eyecare including LASIK and other medical expenses not covered by standard health insurance policies. It also covers less typical expenses which improve overall health such as gym memberships and yoga classes. Some FSAs also cover the healthcare of dependants.

The best part about drawing from a plan like this for your LASIK surgery is the money has been designated for your health before the deuction of payroll taxes. If you paid for the surgery from your savings, you would have first had to pay tax on these funds, so this option is well worth looking into, even if you can afford to pay cash for the surgery. Look upon it as a subsidy or discount from the IRS! In effect it reduces the cost to you of the surgery as it lessens the amount of taxes you will pay overall. Money allocated to an FSA must be spent on health during the allocated year, so it makes sense to use it rather than possibly losing it. Make sure that LASIK is one of the procedures that is covered by your FSA before committing to the process.

A flexible spending account usually comes with a credit card so that you can pay for your LASIK surgery immediately and the paperwork is passed directly to the company, minimizing paperwork. There is a limit per year on FSAs, usually of around five thousand dollars, but this should more than cover the costs of LASIK surgery which typically runs between two and four thousand dollars per eye. Generally only one eye is treated.

The reason FSAs are paid out before taxes are taken is as an incentive for FSA holders to allocate a budget to be spent on their health. If nothing is required, then as the end of the year approaches, rather than losing the money paid in, account holders are likely to take a more proactive approach to their health. Spending money on a full health check, dental work or eye surgery will all pay dividends in the long run. The savings to the FSA holder begin immediately as generally after surgery glasses and contact lenses are no longer required, although in some cases reading glasses may still be required for close work. Even those patients who have sufficient regular savings should certainly think about opening an FSA if they are considering refractive surgery. Remember the bill is paid from your pre-tax income, lowering the amount of income that is liable for payroll taxes. Instead of making a hole in your savings, which have been put away after paying tax on them, paying for LASIK with an FSA makes a whole lot of financial sense.

Do you have a FSA account at your company? Where you able to use it for Lasik? Comment below.

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