Flexible Spending Accounts (FSAs)
Flexible spending accounts (FSAs) let you pay for eligible expenses with tax-free dollars. Note: The IRS imposes a ‘use it or lose it’ rule and your unspent FSA funds from January 1 to December 31 must be used by March 31 of the following year, or they will be forfeited.
The Three Types of FSAs Are:
Plan Information
Plan Name: XXXX
Policy Number: #XXXX
Effective Date: XX/XX/XXXX
Network: XXXX
Healthcare FSA
Contribute pre-tax dollars up to the IRS annual maximum of $3,300 to pay for eligible healthcare expenses such as:
- Copays
- Prescription costs
- Contact lenses
- Eyeglasses
- Other eligible out of pocket costs associated with your medical, vision, and dental plans
- Eligible over the counter items such as pain relievers, feminine products, and cold and allergy medication
Go to FSAstore.com for thousands of items that are eligible through your FSA.
Eligible participants are allowed to rollover up to $640 of unused Healthcare FSA funds to the following Plan Year. The minimum amount that can rollover must be greater than $10.
Limited Purpose FSA (Only if Enrolled in the High Deductible Health Plan)
Those enrolled in the High Deductible Health Plan (HDHP) can contribute pre-tax dollars up to the IRS annual maximum of $3,300 to pay for eligible vision and dental expenses.
Dependent Care FSA
Contribute pre-tax dollars up to the IRS annual maximum of $5,000 ($2,500 if married and filing separate tax returns), to pay for daycare expenses associated with caring for elder or child dependents up to the age of 13 that are necessary for you or your spouse to work or attend school full-time. You cannot use your Healthcare FSA to pay for Dependent Care expenses.
Claims
Claims Submission
- Claims must be received by Benefit Resource, Inc. prior to March 1 of the following year.
- Claims denied during the run-out may be resubmitted but must be received by Benefit Resource within 21 days after the run-out ends.
- Eligible participants are allowed to rollover up to $640 of unused Healthcare FSA funds into the following Plan Year. The minimum amount that can rollover must be greater than $10.
How Much Could You Save?
Here’s an example. Let’s say Tom decides to set aside $2,000 in an FSA for the year. Normally, on that money, he’d pay $560 in federal income tax, $100 in state income tax, and $153 in FICA tax. So, by contributing that $2,000 to his FSA, he’ll get an $813 tax savings for the year.
Without the FSA, Tom would pay:
- 28% in federal income tax: $560 savings
- 5% in state income tax: $100 savings
- 7.65% in Federal Insurance Contributions Act (FICA) tax: $153 savings
His total tax savings for the year with an FSA: $813