June Question of the Month: How much should I save in my FSA?

Dear Gina –  I always find it difficult to estimate how much I will need to elect for my Health FSA every year.  Do you have any suggestions?  Also, if I elect an amount too small and later find out I need to have a surgery, can I increase my election mid-year? – Corinne G., FSA participant

Yes, Corinne, because FSA’s are typically use-it-or-lose-it programs, it is important to plan ahead when determining the amount to contribute to your FSA. I suggest you base your Health FSA election on what you and your family will spend on known items like prescription copays or procedures you are planning to have done in the plan year.  For example, if someone in the family is on a maintenance medication, multiply the copay by twelve months and elect that without fear of losing anything.  Also, look at prior years for a hint as to how many times you or your family go to the doctor every year.  Does one person in the family always meet the medical deductible?  Then, elect an amount to cover the deductible.  If no one ever meets the deductible, elect more conservatively.  My best advise is to elect an amount based on what always happens or what you are planning to have happen.  Don’t base an election on “what if…..?”

As far as unexpected expenses, if you elect $500 for the plan year and later find out you need a surgery, unfortunately you cannot increase your Health FSA election (nor can you decrease if you determine midyear that you won’t need all the money).  If it’s possible, try to postpone the surgery date for the following plan year.  Then you can include the cost in the following FSA plan year.

Thanks for inquiring!

– Gina



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