10. Use a health care spending account to pay for medical expenses with pre-tax money. If your employer provides you access to a flexible spending account (FSA) or health savings account (HSA), use it. These accounts let you set aside pre-tax money from your paycheck to pay for eligible items like prescription drugs, deductibles, coinsurance, dental expenses and vision care. You get to save for these expenses gradually, rather than having the money in your checking account when the need arises. And, because you don’t pay taxes on the money, you are actually getting a “percent off” or a discount on everything you purchase with your saved money. For example, assuming the government takes 20 percent of your income, and you put $500 in your health care spending account, you save about $100 in taxes.
Health care costs are tied directly to utilization; when you use your health plan more, there are more claims. And the higher the claims, the more you and your employer must contribute to pay for these claims. Don’t forget that the most cost effective way to reduce the cost of health care is to make better decisions about the way you live, including the way you eat, exercise and spend your healthcare dollars.
Check out more articles about utilizing your benefits on the Benefits Blog. Follow Austin Benefits Group on social media for more tips and resources.