My only experience with an FSA is when I was employed and it was funded by paycheck deductions and administered via my employer and their insurance carrier.

Is there a way to fund my own FSA? We don't have a lot of medical expenses other than co-pay but we don't have dental insurance and between me and my wife we spend a significant amount of money annually trying to keep what choppers we have left. It'd be nice to get a little tax break on that expenditure.

We don't have enough other deductible expenses to make itemizing an option. We always do better with the standard deduction.

Good question and I do not know the answer as I have only seen FSA's set up for businesses.

Do you have a small business? If yes then you need to have a formal plan document that you can produce if you are subject to a DOL audit.

Without the document the IRS will nullify the plan, disallow the pre-tax deductions, and of course can levy penalties/interest.

Maybe check with your accountant?

Do you mean an HSA, or an FSA? They are two different things.

If an HSA, the requirement is to be a participant in a qualified high-deductible plan. As I recall, you may be retired and may not meet that requirement? If you did, you can make direct contributions to an HSA, I've always done this rather than through payroll deductions to the HSA to allow me to shape timing and amounts.

If you really meant an FSA, that's a vehicle normally propped up by an employer with amounts only coming in by employer contribution and/or payroll deductions.

@ h20ys: Don't have an accountant. Doesn't seem necessary as I don't have any money either...

@ Georgeair: Either would work but my amateur sleuthing indicates that being on Medicare precludes eligibility for an HCFSA.

There's a slim possibility that a general FSA might be possible if DFAS (Defense Finance and Accounting Service, the office that handles my military retirement) has that option. I haven't gotten in touch with them yet.

From the IRS:

"You contribute to your FSA by electing an amount to be voluntarily withheld from your pay by your employer. This is sometimes called a salary reduction agreement. The employer may also contribute to your FSA if specified in the plan."

So, yes, you can self-fund, but via payroll deduction. You can't transfer $ or deposit a check into an FSA.

I wish Congress would open up HSAs to everyone just like IRAs & increase the yearly contribution limit.

quote:

Originally posted by mikeyspizza:
From the IRS:

"You contribute to your FSA by electing an amount to be voluntarily withheld from your pay by your employer. This is sometimes called a salary reduction agreement. The employer may also contribute to your FSA if specified in the plan."

So, yes, you can self-fund, but via payroll deduction. You can't transfer $ or deposit a check into an FSA.

That's the problem. I'm retired. As far as I can tell, I'd have to do it through an insurance company and I expect the administrative fees would outweigh any tax savings I might accrue.

I guess I'll continue to do what I've been doing: Tuck the money in a rainy day account and accept the insulting pittance they call interest these days.

quote:

Originally posted by lkdr1989:
I wish Congress would open up HSAs to everyone just like IRAs & increase the yearly contribution limit.

I you can do a high deductible health plan, than you can get an HSA account.

quote:

Originally posted by ScorpionBoy:

quote:

Originally posted by lkdr1989:
I wish Congress would open up HSAs to everyone just like IRAs & increase the yearly contribution limit.

I you can do a high deductible health plan, than you can get an HSA account.

Not if you are on Medicare.

HSA: Health Savings Account. You must purchase an HSA qualified high deductible medical plan (either via an employers plan or an individual medical plan) and not be eligible for other "low deductible" health insurance, Medicare, etc. coverage. Then you can open up and contribute to a HSA account to fund the high deductible, coinsurance. etc. The funds in your HSA account are yours and follow you for as long as they last. If you ever lose the qualified high deductible medical plan, you can still use the funds already in the account but you can not contribute new funds in the HSA account.

FSA: Flexible Spending Account. There are 3 rungs to these IRC Section 125 tax savings plans. 1) The first is a Premium Only Plan (POP). These are usually set up by a business and it allows the employee (ee) to contribute their share of the premium cost on a pre-tax vs post-tax basis. 2) The next rung is a medical/dental account. You can contribute funds to this via pre-tax contributions via your employer. The funds are yours like in a HSA, BUT, they operate under a "use it or lose it" basis. The law allows a $500 rollover from one year to the next but not every employer has that option set up. The funds can pay for any IRS defined health/dental expense. 3) The last rung of the ladder is dependent care reimbursement. This can be for child or adult day care. The day care must be legit and actually pay taxes.

So if PHpaul is retired, and on Medicare, he is not eligible for a HSA and the only FSA's I am aware of must involve a business who has set up the FSA.

I hope this helps!