FSA account and Health insurance - help me plan

[frugalnacho]

I have a new employer and they offer an FSA account.  I'm unfamiliar with using one.  I know the basics, but I am unclear of the details so I want to run my plan by you guys first.

We are 7 months pregnant - due late october.  Everything we've paid into our old insurance for the last 8 months is irrelevant, and the plan is terminated.  Now we are starting over fresh with with a new plan - deductible/out of pocket max (OOPM) are both reset.  The monthly cost between the plans is not that much, so I think I should choose the plan with the lowest OOPM.  I only have to pay the premiums for 4 months this year, but I anticipate the bill for the birth being more than $3k (the individual OOPM for the plan).  The other plan's OOPM is $4k, but the difference in premiums will be about $80 for the rest of 2017.

When my baby is born I am eligible to change plans.  I think I should probably choose the same plan with the lowest OOPM for the same reason. The baby will probably incur medical charges.  I have no idea what to expect exactly, everyone I ask has a completely different experience when it comes to getting charged for having a birth ranging from paying nothing to paying their OOPM.

Does this make sense?

And on to the FSA.  I can contribute up to $2600 annually, but only $500 will roll over and I lose the rest if I don't use it.  When exactly do I have to use it?  If we birth in October and I don't get any medical bills until January 2018, do I lose everything in my FSA?  I'm fairly confident we will incur $2100 worth of charges in 2017, but I don't know when I'll actually get the bill and how that all works.   

[rubybeth]

Usually you have a few months after the start of the first of the year. Because you will incur the costs in 2017, you likely have until something like the end of March 2018 to spend out the FSA funds. But talk directly to the provider to find out what the deadline is.

[frugalnacho]

Usually you have a few months after the start of the first of the year. Because you will incur the costs in 2017, you likely have until something like the end of March 2018 to spend out the FSA funds. But talk directly to the provider to find out what the deadline is.

HR is slow an unresponsive. From what I've read you can have either a $500 rollover credit, OR a grace period up to March 15 of the following year for your FSA.  The FSA can only offer one of those benefits though, and it has to be the same for everyone in the company.  They have stressed the $500 rollover amount, so I'm guessing my spending period ends on Dec 31.   That makes me nervous that I might not be able to utilize those funds in 2017 because  I might not get a bill in 2017.

[rubybeth]

Usually you have a few months after the start of the first of the year. Because you will incur the costs in 2017, you likely have until something like the end of March 2018 to spend out the FSA funds. But talk directly to the provider to find out what the deadline is.

HR is slow an unresponsive. From what I've read you can have either a $500 rollover credit, OR a grace period up to March 15 of the following year for your FSA.  The FSA can only offer one of those benefits though, and it has to be the same for everyone in the company.  They have stressed the $500 rollover amount, so I'm guessing my spending period ends on Dec 31.   That makes me nervous that I might not be able to utilize those funds in 2017 because  I might not get a bill in 2017.

I guess you can ask the hospital to send you the bill right away. If the birth happens in October, you'd likely get a bill in November anyway. But you can ask the hospital how their billing works--I would guess they'd get it to you pretty soon afterward, since they want to get paid and likely understand the FSA deadline stuff.

[frugalnacho]

Usually you have a few months after the start of the first of the year. Because you will incur the costs in 2017, you likely have until something like the end of March 2018 to spend out the FSA funds. But talk directly to the provider to find out what the deadline is.

HR is slow an unresponsive. From what I've read you can have either a $500 rollover credit, OR a grace period up to March 15 of the following year for your FSA.  The FSA can only offer one of those benefits though, and it has to be the same for everyone in the company.  They have stressed the $500 rollover amount, so I'm guessing my spending period ends on Dec 31.   That makes me nervous that I might not be able to utilize those funds in 2017 because  I might not get a bill in 2017.

I guess you can ask the hospital to send you the bill right away. If the birth happens in October, you'd likely get a bill in November anyway. But you can ask the hospital how their billing works--I would guess they'd get it to you pretty soon afterward, since they want to get paid and likely understand the FSA deadline stuff.

Hospitals, dr offices, and labs are anything but efficient.  Usually they send it to insurance, and insurance sends it back to them, and then they send it out to me, and they all take their sweet time doing it.  I've gotten bills nearly a year after the service was offered.  I would think they'd want to get paid, especially from a responsible person like myself who pays all bills in full immediately, but on the other hand it's such a large behemoth that none of the individuals in the chain really give a fuck who pays what or when, they just push it along to the next in line or whatever their protocol says to do. 

I will have to inquire at the hospital.  I want to make sure I can utilize at least $2100 in 2017 so I don't lose it.

[rubybeth]

I wouldn't ask HR for info. on the FSA--I would contact the FSA administrator directly about details.

And definitely call the hospital billing department for details. My husband and I are heavy users of medical care and usually get bills quite quickly.

[affordablehousing]

My experience is that even if you have to use the money by 12/31, it may be for expenses incurred by then. For instance our plans have the grace period until 3/31, though I think you have until 5/30 to submit expenses as long as they were incurred before 3/31. Call the FSA provider, most HR departments suck.

What a crummy situation, sorry your insurance switch will cost you so much out of pocket.