The Truth About Flexible Spending Accounts
(Common Myths Dispelled)

1. It will lower my tax refund in April. Taking advantage of MyFlex doesn’t change what you do at tax time. You actually get a “tax refund” on every paycheck after joining the MyFlex plan, because you pay no tax on the money you set aside.

2. I could lose my money if I don’t use it. You decide how much money to put into the plan and where and when you spend the money in your account. This is a great way to budget. A regular amount is deducted from your paycheck, but the entire annual election is always available for you to spend on healthcare expenses from day one of the plan year. (Note: Only amounts contributed to date are available for dependent care expenses.) You may also be allowed to incur expenses up to 2½ months after the plan year end to reimburse those expenses if your employer elected this option.

3. There’s too much paperwork. Actually, there is very little paperwork. Some of your healthcare expenses such as co-pays and deductibles may be automatically reimbursed without filling out a claim form. For other expenses, you can print a claim form from the website and submit it along with your detailed receipts. If your employer has chosen the debit card option, you may not need to turn in a receipt for co-payments or prescriptions. (However, the IRS requires you to save your receipt.)

4. I’m close to retirement—I don’t want to make my social security benefits any smaller. Social security benefits are based on your lifetime earnings history. Your social security benefits may be slightly reduced by participating in the plan. However, tax advisors will tell you that the tax savings you earn today far outweigh any social security benefits reductions you might incur in the future.

5. I thought the plan was only for prescription drugs. Not any more. With the new IRS Revenue Ruling, over-the-counter drugs (cough syrups, pain relievers, allergy medicine, etc.) may be reimbursed through your plan.

6. I thought it was only for people with children. Everyone has medical expenses, not just families. And now, over-the-counter drugs may be reimbursed.

7. My spouse also has a plan at work. You may incur more medical expenses than your spouse’s plan allows you to elect. There is no IRS limit on the amount of medical expenses that can be reimbursed per household (however, your employer may limit the dollar amount), so join your employer’s plan to save taxes on additional medical expenses.

8. I can’t afford to have any more money taken out of my paycheck. Did you know you could get money out of the plan before you put money in? By joining the plan, you can have the plan pay your healthcare expenses in full at the time of service even before you make your contributions.