VIV Says: Blog

It’s open-enrollment season at many companies — the time when employees can choose a different health plan for 2009. And surprise, surprise, benefits analysts report that employers are looking for additional ways you can help foot the ever-increasing cost of health care. In fact, the benefits firm Hewitt Associates estimates that out-of-pocket health expenses will jump another 10 percent next year. Ouch! Such dismal news was almost enough to make us want to dump the forms in the circular file and drown our sorrows in a glass of Shiraz.

So what held us back? The notion that you can shave hundreds or even thousands off your health bill next year by wisely estimating your costs and socking that money away in a flexible spending account (FSA), which allows people to pay for out-of-pocket medical expenses such as LASIK or dental crowns with tax-free income. Surprisingly, less than 20 percent of all employees offered FSAs take advantage of them, according to Ceridian Benefits Services. And while some plans require you to submit paper receipts, others make it supereasy by allowing you to pay for eligible expenses with a special debit card.

To figure out how much to allocate, first take a look at bank statements and credit-card receipts to tally what you paid out-of-pocket last year. Then, consider any medical or dental procedures not covered by insurance, addition or subtraction of dependents or other changes that might occur in 2009, as well as increases in your health plan fees. Here’s a basic calculator to get you started, as well as a general list of eligible (and ineligible) medical expenditures.

Remember, you lose whatever funds remain in the account at the end of the year, though if you’re stuck with a little extra in December, you can always stock up on ibuprofen to help quell those medical bill-induced headaches. What OTC remedies do you find yourself buying the most?