It’s coming up on on open enrollment time at my husband’s work. This is the time of year where we get to make decisions on our health care, dental, life insurance, and more.

Last year was the first time I ever gave much thought to the choices we were making. It’s also the first year that we opted to set up a medical flexible spending account (FSA).

If you don’t know how an FSA works, it’s simple: You can set aside a portion of your earnings pre-tax to use for certain health care expenses such as clinic co-pays, prescriptions, and deductibles. You can also set up an FSA for day care expenses, but since I’m a stay-at-home mom, we don’t need that.

So the big perk is that you won’t have quite as big of a tax-bill. It also forces you to save for health care expenses, which is something most of us neglect to do. The downside is that if you set aside $1,000 in an FSA, you must spend it all by the end of the year or you’ll lose that money. You also have to remember to fill out the paperwork and send it in, which is a challenge for me sometimes.

Because I was afraid we wouldn’t spend all of our FSA in a year (silly me… I forgot I had three children!), we only set aside $500 in our FSA last year. While it helped a little, it didn’t even cover our deductibles for the year. Based on our visits to the doctor and prescription medicine needs, we will be raising our FSA to $1000. This should cover our family deductible, with a little left for co-pays and prescriptions.

I’ve been doing quite a bit of thinking about our FSA this year… spurred on by Kacie’s thoughts at Sense to Save and this article from the Star Tribune by Kara McGuire.

I am certain we will use all of the money this year because the reimbursement procedure is changing. Rather than having to submit receipts and forms, we will be able to use a debit card that will take the money right out of our FSA! It will be much easier to keep track of our health care spending, too.

Of course, we’ll continue to practice other health care saving measures and getting our flu shots. And maybe.. just maybe, we’ll start exercising!