Flexible Spending Accounts
A Flexible Spending Account (FSA) allows you to pay for out-of-pocket medical, dental, vision and dependent care expenses with pre-tax dollars. All FSA contributions are deducted from your paycheck on a pre-tax basis, which can help reduce your taxes and increase your takehome pay. You save approximately 25% of each dollar spent on these expenses when you participate in an FSA.
There are two types of FSA plans available: Medical FSA and Dependent Care FSA. Employees that currently participate in the FSA plan must re-enroll in order to continue participating in
the upcoming plan year.
FSA Eligibility
Eligible employees can enroll in the Medical FSA, the Dependent Care FSA or both, at open enrollment. Once you enroll in the FSA, you cannot change your contribution amount during the year unless you experience a Qualifying Life Event, such as marriage or the birth of a child.
Medical FSA
This FSA account allows you to set aside pre-tax dollars to help pay for certain out-of-pocket expenses such as deductibles, coinsurance, copays and eligible prescribed over-the-counter medications and medical supplies. The maximum amount you can contribute to this account is $2,750 per year. This account is pre-funded at the beginning of the year. The amount you intend to contribute for the year will be available on the first day the account is open. This is a “Use It or Lose It” account; however, you can rollover up to $550 of unused funds to the next plan year. Any
unused funds over $550 will be forfeited. Eligible expenses include, but are not limited to:
- Doctor Visits
- Specialists Visits
- Prescription Drugs
- Medically Necessary Over-the-Counter Drugs
- Chiropractic Services
- Psychiatric Care
- Dental/Vision Expenses
- Laser vision or Eye Corrective Surgery
- Surgery
- Surgery Fees
Dependent Care FSA
This FSA account allows you to set aside pre-tax dollars to help pay for dependent care services (child or elder) for your eligible dependents. This account cannot be used to cover health care
expenses incurred by your dependents. The maximum amount you can contribute to this account is $5,000 per year, per family or $2,500 for a married person filing separately. This account is not pre-funded, you can only use funds you have contributed to the account at any given time. This is a “Use It or Lose It” account. Any amount left in your account at the end of the year, will be forfeited. Eligible expenses include, but are not limited to:
- Child Daycare Services
- Adult Daycare Services
- Expenses for Preschool/Nursery
- Before and After School Care
- Baby Sitters
- Summer Day Camp
- Extended Day Programs
- Au Pair Services
FSA Debit Card
You will receive an FSA debit card, a “Benny Card”, which can be used to pay for eligible health care expenses at the point of services. If you do not use your FSA debit card, or if you have expenses to be reimbursed, you can submit a claim form available by contacting 24HourFlex. You must retain your receipts as proof of eligible expense reimbursement to justify your point-of-sale transaction and to ensure it was for an FSA-eligible item. Receipts should be submitted to 24HourFlex within 45 days from the date of purchase.
FSA Rules and Regulations
Plan your annual FSA contribution amounts carefully; the election you make when you enroll is binding for the entire plan year (January 1 to December 31) unless you have a Qualified Status
Change (as explained in the enrollment section). Additionally, the IRS imposes some rules and restrictions on the way you can use your FSA, including:
- You must incur eligible expenses during the plan year.
- You may “roll-over” up to $550.00 from the 2020 plan year in to the 2021 plan year.
- You can’t transfer money from one account to another. For example, money in your
Medical FSA can’t be used for Dependent Care expenses, and money in your Dependent Care FSA can’t be used for health care expenses.
