Flex accounts are governed by IRS rules. For medical/dental etc reimbursements, you can use them even though you have not contributed in full to them. You can use the entire amount after your first yearly contribution to the account. This does not apply to child care though. This is off an IRS site

Distributions From an FSA

Generally,
distributions from a health FSA must be paid only to reimburse you for
qualified medical expenses you incurred
during the period of coverage. You must be able to
receive the maximum amount of reimbursement (the amount you have elected
to contribute for the year) at any time during the
coverage period, regardless of the amount you have actually contributed.
The maximum amount you can receive tax free is the total
amount you elected to contribute to the health FSA for the year.
click distributions from an FSA

I always contribute the max, $3500. Last year I used it all during the second month of the insurance year (on dental). So no, you don't have to wait until you have contributed the full amount, thank goodness. :-)

I think Rocky is confusing HSA with FSA. With an FSA, what aardvark has written is correct. With an HSA, what Rocky has written is accurate.

A couple of notes on an FSA:

1. Yes, you can use before it has all been deducted from your paychecks. This helps tremendously.

2. Some FSA's issue a "benefits card" which is like a visa/credit card which the healthcare provider can run. When I have not had this option, we had to pay out of pocket and then provide the paperwork and get reimbursed which has been a burden for our family at times.

3. Save the necessary paperwork to back up whatever services you receive. Most of the time, the best thing is an EOB from the insurance company. If your provider over-charges based on an estimate of what insurance will pay, you will have to make up the difference or provide documentation for other medical costs that are covered.

I belive localeater is correct about HSAs and FSAs. I've had both (at different times). HSA balances accumulate over time and can eventually be used for retirement if you don't spend them on health care; FSAs are "use it or lose it" plans, where if you don't used the $ by the end of the year (I think we usually had until March of the following year, but that may be plan specific), you lose the money.

But research Medicare, Social Security and HSA; one must stop contributing to an HSA 6 months before applying -for Medicare or risk a penalty... can't remember details but be sure to know what the regs are.

You should be able to roll at least $500 to the next year....my FSA automatically pays copays.....so if I need to "save up" for a known procedure, I have to circumvent that. If I pay oop, they send me a check.

You are right! I misread the question! I deleted my comment so I dont confuse anyone else! Sorry!

Thank you all so very much! I've learned a lot and am most likely going to go ahead and establish an FSA for 2017. I believe the $500 roll to 2018 also applies, so that's good news. Great to know how this works, as it seems the information I've read on my plan is not plain-spoken enough for neophytes like myself.

I did it for the first time this year myself, IdaClaire, and wish I had done it sooner. We put in $1000 (our year started in July 2016) and had some unexpected expenses, and I am already down to $171. Will probably do $1200 to $1500 next year. Rollover is $500.

I just opted for it. My max contribution is $2,500 and I'm sure my dental work will gobble that up in no time.

I agree with tackykat - I don't know why I didn't take advantage of my FSA sooner! Glad you got it figured out.

I would write the administrator of your plan for specifics to your plan. There are general rules but there may be specifics which are just a bit different. It may be that an employer has 2 or 3 options and its best to get the answers from the horse's mouth.

"Some FSA's issue a "benefits card" which is like a visa/credit card which the healthcare provider can run. When I have not had this option, we had to pay out of pocket and then provide the paperwork and get reimbursed which has been a burden for our family at times."

Tried using our company's FSA plan with a benefits card one year, it was horrendously inefficient, the card quit working sometime during the year and I swore to myself Never. Again.

The theoretical savings in taxes (because if you can't access or don't use your set aside you lose the money anyway) simply doesn't offset the aggravation, inconvenience and sheer frustration of adding yet another layer of bureaucratic nonsense to my life. No thanks.

I wondered about that running, and never opted in at my workplace.

It may be that different employers will set them up differently. For mine, no money would roll over -- if you didn't use it, you lost it (which I never understood why the government set them up that way -- I earned that money!). And, one year I did lose it, because I thought the expenses I submitted were eligible, but since they were covered by my insurance I couldn't use the FSA money to pay for them.

There is also the type of plan where your employer funds a account with a set dollar amount which will be used first, before insurance kicks in, for any eligible expenses and counts toward your deductible. I can't think at the moment what this account is called but it is similar to FSA and HSA. My employer has offered this the past several years, but now is changing to a high-deductible plan with an HSA -- which will mean more out of pocket for me if I should happen to have a need, but does have that advantage of being able to keep any unused HSA money forever.