A flexible spending account or flex account for short is a way to save money pretax, and use that money during the year for medical expenses not covered by your plan, copayments, and over the counter health items. The one possible downside is that any money not spent from the account by the end of the calendar year is forfeit. For those that take advantage of the flex account, it’s good to pay attention to your balance and as the end of the year approaches make a discretionary purchase such as eyeglasses that likely aren’t covered in full. This pretax status means that if you are in the 28% bracket and put aside $2000, you benefit by $560. For some people, not a huge amount, but for others, over $45 per month they can spend on other items.
Now, a recent proposal from the Senate Committee on Finance recommends eliminating flex account as an option to help fund a small portion of the costs for health care reform efforts. This is very unfortunate as those most likely to benefit from these accounts are those with chronic conditions who require ongoing care.
A grassroots effort Save My Flexplan has been created to bring a message to Washington, telling congress to reconsider this proposal. Let’s not let them chip away at these small benefits without tell them how we feel.