response 62 of 96:

Feb 2 19:03 UTC 2006

Re #58: T Rowe Price is a good low-cost provider; glad to hear you have
them instead of some gouging crooks like Smith Barney or Principal.  The
$15k limit still applies; if you contribute 75% of your income, the
deductions will stop once your contributions for the year hit that
amount (and that's the amount for both pre and post tax contributions
combined.)  Note that limit applies only to your contributions, not
matching money from your employer.  My plan allows me to put in 50% of
my income, but if I actually did that I would hit the 15k ceiling pretty
quickly.

There are currently two different kind of tax-advantaged savings plans
for medical expenses, FSAs and HSAs.  FSAs are the ones with the annual
use-it-or-lose-it provisions.  Fortunately, now that FSAs can be used
for things like OTC medication it's easier to use the whole thing.
Worst-case, you just empty the account by buying a bunch of aspirin on
December 31st, then take it all back for a refund on January 2nd. :)

Both plans are of limited practicality, and both are only needed because
of the fact that the medical expenses deduction on federal income tax
has so many restrictions that few people are able to get any benefit
from it.