The Basics of the FSA
Amway offers its employees 2 types of FSA’s
Traditional Flexible Spending Account
This FSA is for use in conjunction with the Amway PPO plan only. An FSA is an expense account into which pre-tax contributions are made directly from your paycheck. From this account you pay for any out-of-pocket medical expenses not covered by your insurance. By paying for eligible medical expenditures using pre-tax money you can save a significant amount of money and lower your annual taxable income.
- for use with the Amway PPO Plan
- uses pre-tax dollars
- pay for all eligible out-of-pocket medical expenses not covered by your insurance
- lowers your earned income, lowers your income tax
- must spend all the money in the account each year or you forfeit what is left over at the end of the year
- use it or lose it
Limited-purpose Flexible Spending Account
The Limited-purpose FSA can only be used with the Amway Consumer Plan. This FSA is also an expense account into which you contribute pre-tax money directly from your paycheck. You use this money to pay for qualifying out-of-pocket expenses related to preventative care, dental, and vision expenses not covered by your High Deductible Health Insurance. You can save a lot of money each year by paying for your out-of-pocket medical expenditures with pre-tax money. In addition, your taxable income is lowered, thus saving you in income taxes, as well.
- for use with the Amway Consumer Plan
- used in careful partnership with HSA
- uses pre-tax dollars
- pay for all eligible out-of-pocket vision, dental and preventative medical expenses not covered by your insurance
- lowers your earned income, lowers your income tax
- must spend all the money in the account each year or you forfeit what is left over at the end of the year
- use it or lose it
Create a Complete Strategy
Anticipating next year’s out-of-pocket medical expenses can be difficult – no one has a crystal ball. However, taking the time to review past years’ expenses should allow you to make an educated guess for your future expenses. Whichever plan your choose, PPO or Consumer, an FSA, if carefully managed for targeted expenses, will save you money each year.