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Personal Finances / Living Below Your Means


Subject:  Re: Poll: cataract surgery now or after age 65? Date:  10/9/2012  9:11 AM
Author:  toberead Number:  867982 of 902743

Sorry, sorry but I am STILL confused...where does the money come from to pay my doctor if it isn't in the account? Do we pay the medical bills as usual and then try to get reimbursed from an account with insufficient money in it?? And doesn't DH owe the MSA what he said he'd put into it, even if he retires? Do they just take the remainder owed out of his final paycheck? Or does some amorphous "they" pay our bills?--that can't be right. What am I not seeing?

This is the way it works for me. I have a certain amount withdrawn from each paycheck, which does into my flexible spending account. I don't have direct access to this account - it's not like a regular bank account. The only way to get money in or out of it is through the FSA.

When you have a medical expense, you send in copies of your receipts and a form you fill out. If the expense is approved (the expenses that are eligible are limited to certain things), you get a check in the mail for reimbursement. (I've heard some people can pay for these things directly under some kind of debit card system but our system strictly uses reimbursement checks.)

The account is, in theory, fully funded on day one. Even though you're paying $100 per month into the account, the FDA considers the account at $1200 with a debt of X (which is the amount you still owe). You can spend up to $1200 from this account even if you spend it all on January 1. You will still be paying $100 per month into the account so the FSA will eventually get their money.

If someone leaves their job before paying the entire amount, the FSA just closes the account but doesn't try to collect for the amount that was still owing from the monthly paychecks. It's a nice feature. They make up for it on the other end, from people you "lose" their money by not spending it all each year, so it probably works out for them.

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