I decided to enroll in Healthcare Flexible Spending Account (FSA) for the next year for $200.

Thanks to the generous medical insurance package of my employer, in 2003 I only paid out very limited medical expenses.

- $80 for a pair of glass (above insurance allowance)
- $75 for dentist (deductible and copayment)
- $60 for OTC drugs

I don't foresee any big medical bills for now, but believe I will incur some small expenses here and there anyway. The benefit of the FSA is that any deducted amount is not subject to income tax and FICA tax. To me, this means with $200 deduction I can save $52.90 in both taxes ($200 * (25% + $1.45%), these $200 is not subject to Social Security tax anyway because I have maxed out Social Security tax annual limit). The amount of $200 also limited my exposure of having to buy lots of items to use up the fund at 2004 year end.

Admittedly it is not a big amount of money, but it is more than a few free lunches :-)