General Discussion
In reply to the discussion: I just spent two hours working on complete horseshit. [View all]LuckyCharms
(17,444 posts)1) No, not for a business. I have individual medical insurance for myself.
2) I just have one insurance plan. The "flex plan" I am referring to is as follows:
3) Flex Plan = "Flexible Spending Account" that has nothing to do with actual medical insurance...it is separate and distinct from insurance. In a nutshell, with a flexible spending account, money is withdrawn from your paycheck to fund the account. There is a yearly maximum that you can contribute to the spending account...in my case (probably all cases), I think it is $2,600.
The money withdrawn from your paycheck for this spending account reduces your taxable income by the amount you put into the account. Therefore, your income taxes are reduced.
So you start with a balance of money in this spending account. There is a company that administers this fund of money for you. You then submit to this company your medical bills, usually after you pay them. Let's say you submit a medical bill for $100. The plan administrator will reduce your fund balance by $100, and then send you a check for that amount.
A flexible spending account is a way to put money aside for upcoming medical bills while reducing your income tax burden. The problem is that sometimes the plan administrator uses systems that can't seen to do simple math when they offset your fund balance by the amount of money they reimburse you for your medical bill.
Another problem is that these spending accounts are nothing more that a band-aid attempted fix to what should instead be a simple and straightforward solution to your personal health care financing.