healthcare flexible spending account

Seven Things to Do Before Year End

Posted on December 22, 2011 by Khooppres 3 comments

It is hard to believe that we will be ‘ringing’ in the new year in less than two weeks. If you’re like me, you’re probably wondering what happened to 2011. Over the course of the next week, many of us will spend time with family, give and receive holiday gifts, and take a break from our normal work schedule. During this time, each one of us has an opportunity to perform those administrative tasks that we often put off by saying, “I’ll get to it later.”

As we prepare to say goodbye to 2011, performing the following seven tasks will help you transition to 2012 with ease:

1. Purge Old Mail – This is definitely on my to-do list. I have a difficult time ‘releasing’ mail. I often keep it with the intent of reviewing it or filing it. Because this is a task that I dread, I have procrastinated to the point that I now have a significant amount of mail to shred! If this is your fate too, set aside a day during the holiday and just do it. I will be joining you on this journey. I am looking forward to the sense of accomplishment that I’m sure I’ll have once my kitchen counter is cleared of its current clutter.

2. Review Your Flex Spending Accounts (FSAs) And Use Remaining Balances – This is something that you should do right away. If you have elected to participate in the FSAs offered by your employer, you’re more than likely aware of the spend it or lose it policy. Make it a point to review any remaining balances, and if needed, schedule your final dental or doctor’s appointment for the year. Additionally, review the list of eligible expenses and take advantage of those as well. For those of you that haven’t taken advantage or are not familiar with this type of account, an FSA allows you to set aside a portion of your pre-tax earnings to pay for qualified expenses. FSAs are most commonly used for dependent care or medical expenses.

3. Prepay Your Mortgage – I’m sure that most of us are familiar with the term mortgage interest. If your payment is due January 1, why not pay it before the end of December to ensure that your mortgage interest is captured on your year-end statement for tax purposes?

4. Clean Out Closets And Make Final Donations – Similar to the purging mail concept, get rid of those items that you no longer wear or need. I know that we’ve all heard the phrase, “One person’s trash is another person’s treasure.” During this time of year, it’s important to consider those that are less fortunate; it’s the right thing to do, and it’s also a tax deduction. Don’t forget to request a gift receipt for your records!

5. Make a Contribution to Your Retirement Account – If you have an IRA, you have until April to contribute for tax purposes, but if you are contributing to your employer administered 401k, the deadline is year end. There may still be time to contact your benefits department to increase or make a final contribution for the year. The IRS communicated that the annual maximum contribution for 401ks is $16,500 for those under 50 and $22,000 if you’re older. If you’re contributing to an IRA, the IRS reported that the maximum contribution is $5,000 for those under 50, and $6,000 if you’re older.

6. Review Your Beneficiaries – While you’re making your final contributions for the year, take a moment to ensure that you have beneficiaries listed on all of your investment accounts. This is extremely important. If your company has an open enrollment period and you’ve added or confirmed the beneficiaries on your life insurance, you may have assumed that it also covers your retirement accounts; it doesn’t. Check each investment vehicle separately and verify that you have at least one beneficiary listed.

7. Write down Your Achievements for the Year – No matter what’s happened to you this year, you’re still here, which means you still have opportunity. Life is a journey that is filled with ups and downs. Before you celebrate a new year, take an opportunity to reflect on those things that went well for you in 2011. Perhaps you didn’t achieve every goal, don’t waste time thinking about what you didn’t do; take a moment to ‘pat yourself on the back’ and say, “job well done.” Make a commitment to become your own cheerleader. You are worth it!

I hope that this blog post has given you some ‘food for thought.’ This is indeed the most wonderful time of the year. As you enjoy your time with family and friends, make a commitment to complete some of the administrative tasks that we often put off. While it is important to ‘handle our business,’ I ask that you make a commitment to be ‘present.’ As I close, I’ll leave you with the following quote, “Yesterday is history. Tomorrow is a mystery. Today is a gift. That’s why it’s called the present.” ~ Unknown

From my heart to yours, Merry Christmas!

Choosing A Health Care Plan

Posted on November 8, 2011 by Khooppres Leave a comment

As we prepare for the season of Thanksgiving, this is also the time of year that many employers offer open enrollment of benefits for employees. A major expense that most of us have whether employed or self-employed is health care costs. Life is filled with unexpected events, and you simply can’t plan for them all, but please listen to me when I tell you that exorbitant medical costs can bankrupt you. I’ve heard many people say, “I can’t afford insurance.” I recently selected my benefits and was quite frustrated with the amount it costs to insure a family, but I also know the risk associated with choosing not to do so. If you are in the process of reviewing your health care plan, the following tips may help you through the process:

Identify anticipated medical expenses for the upcoming plan year. Are you planning to expand your family, or is there a medical procedure that you’ve been putting off that you can no longer delay? The answers to these questions are very important as you review your health care options.
Review your current year medical claims. Unless you had extenuating circumstances or a one-time medical procedure, your current year claims may be a good indicator of the coming year expenses. This should be a significant consideration as you compare health care plans.
Compare each plan’s deductible. How much can you afford to pay out of pocket? One of the worst things that you can do is carry medical insurance but be afraid to use it because you can’t afford the deductible. In order to obtain a deductible that you can afford, you may have to pay a bit more in premiums. Medical insurance premiums in most instances are a pre-tax deduction. This means it reduces the amount of taxes you’re required to pay. That being said, while you evaluate the costs before taxes, it’s also important to consider the after tax expense because this is really the best way to evaluate your out of pocket costs.
Review the list of in–network providers. If you’ve developed a rapport with your doctor, you will want to ensure that your physician is considered in-network for any plan you select. It can be difficult to find a doctor that you are comfortable with. Don’t underestimate the importance of this relationship. After all, it is your health we’re talking about.
Evaluate the Prescription Drug Plan. Are you or anyone in your family on any maintenance drugs? In other words, does anyone covered under your plan have prescription drugs that they are required to take on a regular basis? Your co-pay associated with your prescriptions should be factored into your decision when selecting your plan.

I hope this list of considerations will help you as you evaluate your options. In addition to selecting your health care plan, don’t forget to review your options for your Health Care Flex Spending Account. A Health Care Flex Spending Account allows you to set aside a portion of your income pre-tax for eligible medical expenses; this is a great way to help cover out of pocket medical expenses. One word of caution though – only set aside a dollar amount that you know you’ll use in your Health Care Flex Spending Account because if you don’t use it by the end of the plan year, you lose it. Next week, I will continue to discuss health care by taking a look at prescription drug plans for individuals that have Medicare benefits. Stay tuned, and make your week great!

Knowledge Hoop

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Tag Archives: healthcare flexible spending account

Seven Things to Do Before Year End

Choosing A Health Care Plan