Medical accounts offer flexibility: but consumers should carefully examine these savings plans.

Robin Gillespie, a Philadelphia-based personal trainer and fitness instructor, keeps a rigorous workout pace to keep fit. Now she's bringing the same discipline to her finances. Gillespie, 38, recently opened a flexible spending account to help offset physician co-pays and items her health insurance plan doesn't cover.

Gillespie has $50 taken pretax each pay period, totaling $1,300 a year. She'll use the funds for orthotic equipment, such as wrist braces and eyeglasses. "High-quality frames are going to cost at least $200," Gillespie says. "And I usually need a high-quality lens because of my prescription."

Health-related savings plans--like flexible spending accounts and health savings accounts--are offered at an employer's discretion and aren't required by law. However, they can also be purchased from financial services firms.

Health savings accounts work like 401(k) plans. The money stays with you and is funded by pretax salary contributions. Flexible spending accounts are use-or-lose plans, so saving amounts should be carefully thought out. Most financial planners suggest talking to health professionals

to chart anticipated costs and suggest carefully examining such plans before making an investment.

These accounts can be a valuable financial tool to cope with healthcare costs and reduce income tax liabilities, says Antawan Anderson, a partner with Smith Anderson Veney Enterprises L.L.C., a Baltimore accounting firm.

"People who have flexible spending accounts are able to deduct their out-of-pocket payments on tax returns if they itemize their deductions, and there is no limit to the amount you can claim," Anderson says. To maximize savings, he says employees can deduct the full amount that was saved in the account or the actual amount of medical expenses paid, whichever is greatest. "But don't double dip," he cautions, "pick one or the other."

Anderson says HSA's can be obtained through health insurance companies that have high deductible medical insurance plans. "If you're not a sickly person, the money can stay in the account until you're 65," he says. "And any amounts you pay out toward healthcare expenses are deductible under itemized deductions." In 2006, the minimum annual deductions for such plans are $1,050 for an individual and $2,100 for married couples.

To be eligible for an HSA, participants can't have supplemental insurance, be claimed as a dependent by someone else, or be enrolled in Medicare. Consumers can debit the account to pay for approved medical expenses without penalty. But non-medical costs are taxed at an additional 10%. When participants are Medicare-eligible, no taxes are levied and the funds can be used to cover long-term care.

Gillespie thinks she'll use the full $1,300 directed to her flexible spending account this year. In addition to the eyeglasses, it's already come in handy for X-rays to her wrist following a bout of tendonitis.

She says knowing that extra funds are stored away for medical costs give her a sense of security. "I'm not the best at budgeting money for things, and without this, I might have put it off."