Health Care Flexible Spending Account: To opt in or out?

For those of you who just started a new job (read: me), you were probably presented with a great deal of information about your new benefits package. From health insurance to retirement accounts, one word sums it up: unfamiliar. Sure, your employer provides a great deal of information about your available choices, but it can be difficult to sort through all the information to just get to an answer before your enrollment period comes to an end. I was able to pretty easily work through health and dental insurance and after a bit of research I felt comfortable with my 401k. The most confusing part for me? Health Care Flexible Spending Accounts (FCA).

An FCA essentially allows you to set aside pre-tax dollars to be used for qualified health care expenses throughout the year. As with your medical/dental/retirement benefits, your FCA contribution also neatly comes out of your paycheck each period. Here’s the kicker: if you don’t use it all by year-end, you lose it.

In comes the Flexible Spending Account Calculator. This handy-dandy tool helps to simplify your decision on whether to opt-in to this type of program, and even more importantly, how much to deposit. As a 22 year old with no dependents, I’ve decided it’s probably not for me; though YMMV.

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