Outlook Not So Good

I spent a lot of time last week trying to figure out next year’s Flexible Spending Account. If you have one of these at work, you know what I’m talking about. If not, let’s see if I can explain. This is the government’s (the IRS, to be specific) oh-so-helpful way of allowing you to save money on your taxes. How does it work? Well. You figure out what you’re likely to spend on medical expenses next year, divide it by the number of paychecks you’re going to receive, and turn that in to your benefits coordinator.

When you get your first paycheck of the new year, that much money will be withheld. But it’s okay, because all you have to do to get that money back is to prove that you spent at least that much on approved medical expenses – say, a trip to the ER to have a raisin removed from your nose, or a test to see if your brain is about to explode (it’s called stroke detection), or maybe a trip to your friendly neighborhood proctologist for something you’d rather not discuss in mixed company. Fax in your bill or your insurance company’s explanation of benefits, and just like magic, you get the money back.

The whole point of this is to save money on your taxes. Because the IRS deducts the entire amount of your flexible spending account (FSA) from your year’s earnings, the more you have set aside, the less it looks like you earned.

There is, of course, a catch. Of course there’s a catch! It’s the government! You’ve heard the old joke, “I’m from the government and I’m here to help you”? In this case, the catch is that if you do not spend as much as you anticipated, then you will be kissing that money goodbye. Should you have an unexpected outbreak of good health, well, good for you, but bad for your pocketbook. Sure, you’ll save by not paying for all those drugs and doctor visits, but that money you set aside because you thought you’d be spending it on drugs and doctor visits will remain there – set aside. With the government. Which is here to help you.

I don’t understand this. Or more to the point, I don’t accept it. No matter how many times various benefits people have said to me, “Now, of course it’s a gamble” I refuse to nod agreeably and say, “Oh, sure, of course.”

One time long ago, the year was almost over and I knew I was in trouble. I had something like three hundred dollars remaining in my account, and nobody needed health care. Luckily, my kids’ orthodontist was willing to accept (boy, was he ever) payment in advance for the years of work he had planned for their genetically messed up mouths. Whew. Crisis avoided.

On the other hand, last year my account’s paltry funds ran out in, oh, March. I still have the notebook page on which I painstakingly wrote down the names of every doctor, every drug, every test I normally get in a year. It seemed like a lot, because I have perhaps more than my fair share of ailments. (And no, I don’t love going to the doctor. I just don’t love feeling like crap.) So I was having ninety dollars withheld every month.

How was I to know I would end up at one of the country’s best headache clinics just before Easter? How could I have foretold that these doctors would put me in a hospital head pain unit for over two weeks? And that I would leave with a sheaf of prescriptions half an inch thick? Even armed with a Magic Eight Ball, it most likely would have answered only, “Reply hazy, try again.” So although I got all my set-aside funds back, every time I go to another doctor or got more of those prescriptions filled, I seethe with frustration that those fees aren’t counting as tax-free.

So for next year, I’m counting everything. Even the mileage between here and the Michigan headache clinic and back again. I’m assuming I’ll be going there every few months, as I did this year. But who knows? It’s a crapshoot! It’s the government! And I’m left with the weirdest worry I’ve ever had – what if I get better? What then? What if all the name-brand drugs I take suddenly become available as generics? Will that be good news, or bad? I can just imagine someone saying, “Oh, but you’re saving money!” and myself thinking, “No! I’m not!”

What if we had to do this with other aspects of our lives? Let’s see – next year, I predict that I will make six new friends, so I’ll put a six in my new friends account. I feel certain that I will cook five new kinds of soup. And surely I’ll read twelve new books. No more, no less. Ridiculous, isn’t it? What if we had to deposit all the money we thought we would spend at Hy-Vee for the entire year, and once it was used up, that was it, and too bad if a family reunion descended upon us in June and wiped our pantry clean?

I believe in a budget just as much as the next fiscally responsible citizen, but as for predicting how many pairs of shoes, sets of tires, books of poetry, or boxes of matches I’m going to buy in 2011, who knows?

It doesn’t help that I’m a perfectionist. I want my FSA figured to the last cent. I want every penny back. When I give my money away, I prefer to choose my charities. The IRS is pretty far down on that list.