Expenses such as deductibles and copays can quickly add up, and dependent daycare or elder care expenses can be even more expensive. Flexible Spending Accounts (FSAs) offer a tax-free way to pay health care and dependent care expenses you would typically pay out-of-pocket. The contributions you set aside are not taxed, so you save money.
Each year you would like to participate in the FSAs, you must elect the amount you want to contribute to either or both of the FSAs. Deductions will come from your paychecks in equal installments throughout the year and are deposited into your account. Accounts function separately.
Your Health Care FSA election will reimburse you for eligible expenses that you, your spouse, and your dependents incur during the plan year. The entire annual amount you elect can be used at any time during the plan year. When you incur the expense, you can use your debit card or pay out-of-pocket and submit a reimbursement request with documentation to be reimbursed.
Eligible expenses include copays, coinsurance, deductibles, orthodontia, glasses/contact lenses, and much more. For a complete list, refer to IRS Publication 502: Medical and Dental Expenses, available at www.irs.gov/publications.
NOTE: If you are enrolled in the HDHP with HSA, you are not eligible to participate in the Health Care FSA.
Your Dependent Care (or daycare) FSA lets you use before-tax dollars to pay daycare expenses for children age 12 and under, or elder dependents unable to care for themselves. The care must be necessary for you and your spouse to remain employed. Care may be provided through live-in care, babysitters, and licensed daycare centers. You can be reimbursed only up to the amount available in your account.
FSAs offer sizable tax advantages but are subject to strict IRS regulations:
See plan documents for additional information.