I am all for FSAs, they are, contrary to what others say, a good deal. Here is why.
Money you put into your FSA is taken out before you pay taxes on it. Most people are taxed somewhere around a third of their income so, if you can use the money in the FSA, it's a good deal.
- If you're single, young & healthy, it might seem ridiculous because you don't actually spend much money on predictable healthcare expenses. however...
- If you have kids, there's a number of scheduled checkups, immunizations and whatnot.
- If you're older, you may have medical problems that require regular visits to the doctor & prescription drugs that you've been taking daily for years.
- If you have health problems, you'll also have a bunch of medication you need to take.
It can also be good if you have some predictable expenses. If you have poor eyesight, you might want to plan ahead to get a new pair of glasses or contacts. A friend planned ahead for her laser eye surgery, effectively getting a 25% discount on the procedure by not paying taxes on the money.
You can put tax-free contributions into the account to spend on healthcare costs. Depending on your tax rate this can be significant savings. The problem is that if you don't use the money for the year, you lose it. After the ACA, you can now carry over $500.