If your company offers a pre-tax savings plan for Healthcare (such as a Flexible Spending Account or Healthcare Savings Account), it can save you money. Here’s an example of how:

To keep the numbers simple, let’s say your salary is $60,000 a year ($5,000 a month) and your tax rate is 20%. Without having a pre-tax Healthcare savings plan in place, here is the net cost/benefit to you:

Monthly Salary $5,000
Less: Taxes (20%) ($1,000)
Net Income $4,000
2 ($200) IV Therapy Purchases ($400)
Net Income to Spend Elsewhere for Month $3,600

Now, let’s say you have a pre-tax Healthcare savings plan in place and you elect to put $400 a month into your plan:

Monthly Salary $5,000
Less: Pre-Tax HC Savings to Spend on IV Therapy ($400)
Income Before Taxes $4,600
Less: Taxes (20%) ($920)
Net Income to Spend Elsewhere for Month $3,680

In the example above, a client would save $80 a month on their service ($3,680 - $3,600 = $80), effectively lowering their price per IV therapy from $200 to $160!

Anyone can figure out how much they are saving by taking:

  • How much they elect to put into a pre-tax savings plan to spend on IV therapy
  • Knowing their tax rate

In the example above, one can arrive at the $80 savings calculation by taking:

  • The $400 contribution into a pre-tax savings plan
  • A 20% tax rate
Pre-Tax HC Savings to Spend on IV Therapy $400
Multiplied By: Tax Rate you are Being Taxed At 20%
Savings!!! $80
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