“If someone is going to use medical services and has a $1,000 deductible, that will be $1,000 out of their pocket,” Foster said. “Generally, it’s best to make sure your FSA contributions at least align with the deductible on your insurance plan.”
FSA dollars can be used to cover a broad range of costs. In addition to your deductible and over-the-counter health items, you generally can use the money for copays, coinsurance and prescription drugs and supplies.
As you go through the year, be aware of those qualifying expenses and make sure you use your FSA funds to pay for them. And when your company holds its next open enrollment, evaluate whether you need to adjust your pretax withholding for 2019.
“With proper planning, an FSA can be a really good tool in helping you manage your health care expenses in the following year, especially if you know you’ll have ongoing medical expenses,” Foster said.
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