I just got a new job with benefits, including flexible spending (pre-tax) accounts.
My wife already has a job with benefits.
Question #1:
Our whole family has been on her health insurance for a while. Even though my new job will pay most of my individual health insurance, it looks like it would be less expensive (and better coverage) for all of us to stay on my wife’s plan.
If I do that, my employer will put their insurance premium contribution into a medical flexible spending account.
My problem is, I don’t think we’ll spend that much out-of-pocket on medical expenses, so the money will just go away.
But if there were a way to apply that money to the health insurance premium we have to pay at the wife’s job, reducing her contribution, it would be very useful.
Is there any way to do that? Failing that, what might we use the money for?
Question #2:
My wife already has a dependent care flex account maxed out at $5K. Can I also set up a dependent care account at my new job, or is there a limit to the amount a couple can set aside? (We certainly could spend that!)
There is currently talk of allowing you to rollover your money. I would rather take the money and put it into a savings account (yeah, I know, interest rates suck). You won’t make a whole lot of interest, but at least you won’t lose your money (unless the bank bellies up).
For your medical care stuff, you can now claim just about any type of medicine, scrip or OTC. Also, do you have any eyecare expenses (contacts, cleaning sulition, etc)? You can get reimbursed for that as well.
As an aside, if you do end up with too much $$ in yoour account, buy a bunch of contact cleaning solution, get reimbursed, then return it. We did that with our excess ~$150 or so last year. The stuff is fairly expensive, plus most places will take it back if it’s unopened.
Well, you can’t, unless you do the trick with the contact lens solution (which is, well, dishonest… not to mention illegal and the IRS wouldn’t be pleased if they heard about it).
Basically, you can use it for all sorts of expenses such as OTC medications - that’s new this year and very welcome. It’s also good for eyeglasses of course. And also other medical-related stuff - one year, I bought HEPA filters for our house when I realized we were about to lose money.
Things like laser eye surgery - you can use flex spending money for that. No clue if you could use it for, say, cosmetric surgery. And my flex account wouldn’t pay for my Xenical scrip w/o documentation from a doctor.
In your situation (entirely employer-paid) I’d look upon it as free money. So if you can use it, cool, but if you can’t use it all, it’s not like you’re wasting your own money…
One plus to those accounts, I found by accident: I had expenses that exceeded my contributions to date when my division was sold to another company. I’d put aside 450 bucks, but the expenses totalled 800 or so. Because I’d elected more than 800 for the year, they paid me the whole amount… even though I had not put that much aside and never would. Bizarre. I actually called them and tried to return the money but they didn’t want it! So if you’re going to change jobs early in the spending year, schedule something expensive and elective just before you go!
5K for the dependent care: I don’t think you can exceed that for a family, even if you both have access to such an account. Check with the appropriate IRS publication though.