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Insurance

September 27th, 2005 at 01:48 pm

Well it's getting to be that time of year again - open enrollment for medical insurance. Kevin and I are very fortunate
in that, because I'm covered on his company's medical plan, my district pays me MY medical benefit in cash on my
paycheck. We then take that money right off the top and put it into our savings account. It adds up to a nice little
chunk of change. He was paying for vision and dental insurance before we got married, but once married, I could add him
to my dental and vision for no additional charge. Yet another savings! I also buy disability insurance because my school
does not pay for disability for me. We sure were glad we had this last spring when I had to have surgery and was off
work for 6 weeks.

We both buy additional life insurance through our employers so that we get it at a group rate - so we're covered there.
The only other thing we're considering is putting money into a flex account for medical reimbursements. Does anyone
do this? The only thing I'm leary about is dedicating too much money to it. It's a use it or lose it proposition, so we'd
have to be careful about how much we put in versus how much we spend. I believe the plan also said that we could
use it to be reimbursed for co-payments, too. Does this sound correct? I'd appreciate any input that any of you have on
this subject. Thanks!

Posted in Uncategorized | 3 Comments »

3 Responses to “Insurance”

  1. Anonymous Says:
    September 27th, 2005 at 05:44 pm 1127843072
    1127843072

    I'd offer two suggestions: First, regarding the extra life insurance, it may be worth your while to just check out the term life quotes of major companies. For years, hubby and I each got ours through our companies. I checked out John Hancock for me and my coverage went up a lot while my premium went down a lot! Hubby's difference was less drastic, so he decided to stay with work coverage. With these group policies, they have to figure in the average of everybody's health when they set their rates (think fat guy in accounting who smokes a lot). So even though you get the benefit of the group rate, it may be offset by that. Worth a look elsewhere, for sure. As for the Flexible Spending account, it's definitely worth doing. Go through the last year (or two if you have it) of medical expenses (copays, RX, glasses, etc.) and figure out if it's about what it is every year and go for it. Even if it's only $500, that's $500 coming out pretax. Also, you can use it on over-the-counter medecines (Tylenol, Advil, etc.), so if you have a bit of a balance in your account at the end of the year, you could always stock up on that. Good luck!

  2. Anonymous Says:
    September 27th, 2005 at 06:15 pm 1127844950
    1127844950

    FLEXing your medical expenses is great. It is great even if you wind up not spending all of the money in the account and it reverts to your employer. (None of it was taxed to you anyway). Hardly anyone is eligible to deduct medical expenses on their tax returns, so a FLEX account is valuable. The best part is the ability to "borrow ahead" on the account. For example, I got fully reimbursed for little darling's braces even though there wouldn't be enough in the account to cover it all until 10 months down the road. (The downside is that if you leave your job, you have to pay the remaining months of FLEX deductions out of your last paycheck.) Usually I budge too little into this account. The one year I didn't (back to those braces--the orthodontist cut me a break on the second child's fees!) I got prescription sunglasses for everyone to use up the dollars. I still lost $140 (less really, given that it was untaxed income) and it was still way worth it.

  3. Anonymous Says:
    September 28th, 2005 at 02:52 am 1127875976
    1127875976

    Many companies are allowing you to stretch out your flex account for 3 months past your yearly deadline. My company just recently started this. So normally I would have to use up the whole account by the end of Dec and now I have till the end of March. I think it's a new law that was recently passed. Also regarding taxes, if you are in the 25% federal bracket then you could lose up to 25% of what you put in your flex account and it won't affect your bottom line. For example if you put $400 in the account you save $100 in taxes, if you only use $300 of what's in your account you still break even. If you pay state taxes that's even more you can leave on the table if necessary. Of course the best thing is to come out even, but getting within 25% is also a good deal.

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