What is eligible for reimbursement under the Health Care FSA?
Eligible health care expenses may include health care plan deductibles, copayments, amounts over the maximum your plan pays and other expenses not covered by your health plan. If you have questions on specific health care expenses, please feel free to contact your Flexible Spending Account administrator to ask about your specific. All submitted expenses will be reviewed according to the regulations of Internal Revenue Code Section 125.
If I don’t have any medical insurance through my company, can I still participate in the Health Care FSA?
Yes. Out-of-pocket expenses for you and your dependents are eligible for reimbursement whether or not you are insured through your company, but you must enroll in the Health Care FSA to take advantage of the tax savings.
Can I use my Health Care FSA for my family’s expenses?
Yes. You can be reimbursed for eligible health care expenses incurred by you, your spouse or any dependent that you claim on your income tax returns even if they are not covered under your health care plan.
What if I itemize my health expenses on my tax returns?
You cannot receive reimbursement from an FSA for an expense and also itemize the expense as a tax deduction on your tax returns. However, most people do not incur enough out-of-pocket medical expenses to be eligible for any deductions on their tax return (you can only deduct the amount of your medical and dental expenses that is more than 7.5% of your adjusted gross income). For individuals that do not qualify for the itemized deduction, the Health Care FSA makes sense - it’s available for any amount up to your company’s maximum. Plus, you receive the tax savings throughout the year, not when you file your taxes after the end of the year.
What if I have money left in my account near the end of the year?
You lose any money left in your account at the end of the plan year. To avoid losing any money, plan carefully and review your account before the end of the plan year. If you have money left, you might want to schedule an eye exam and annual physical, or purchase additional monthly prescriptions prior to the end of the plan year. Remember, expenses can be incurred by you, your spouse or any dependent. With careful planning, you should never lose any money in your FSA.
Where does the money in my account come from?
The amount you choose to put into an FSA is divided by the number of pay periods you will have during the plan year. This amount is then deducted from your pay throughout the year before taxes are calculated. When you have an eligible expense, you submit a Claim Form along with the documentation of the expense. We process your request and reimburse you for the amount of your expense. Your reimbursement will never be taxed.
- What kind of savings can I realize by participating in this plan?
FSA contributions and reimbursements are exempt form federal income taxes, Social Security (FICA) taxes and, in most cases state income taxes. Depending on your tax bracket, you can expect savings between 22% and 38% on your elected amount.
When will I get paid?
After you incur an eligible expense, submit a Claim Form via fax or mail. We will process your request and send your reimbursement according to your employer’s reimbursement schedule. Your claim must be received two business days prior to the scheduled reimbursement date to ensure payment on that date.
Can I submit expenses I incurred before the beginning of the plan year?
Only expenses incurred during the plan year and while you are a participant are eligible for reimbursement. An expense is “incurred” when the service is provided, not when you are billed or pay for it.
What happens if there is money left in my account at the end of the year and I have no more reimbursable expenses?
Under IRS rules, you will forfeit any money remaining in your account at the end of the plan year. With careful planning though, you should not lose any money.
Can I change the amount of my election in the FSA program during the plan year?
You can only change your election during the plan year as a result of a specified change in status. Refer to your employer’s plan document for eligible status changes.
When I participate in an FSA, will my Social Security benefits be reduced when I retire?
Since your taxable income will be reduced, your earning for purposes of calculating your Social Security benefits could also be slightly reduced. Usually the effect will be insignificant over the lifetime of covered earnings. Check with your local Social Security office for possible effects on your benefits.
If I have a question about my account, who should I call?
You can call the FSA toll-free customer service number to ask questions about your account balances, reimbursements and eligible expenses. After you are enrolled, our automated system can answer many of the basic questions about your account or you can talk to a Customer Service Representative. History and activity specific to your account and your account balances is also available via the Internet. You will receive an account summary with each FSA reimbursement in addition to a quarterly account statement.
Am I eligible to enroll in the Dependent Care FSA?
To be eligible you must be at work during the time your eligible dependent receives care. You must also meet one of the following eligibility guidelines:
- You are a single parent or guardian
- You have a working spouse or a spouse looking for work
- Your spouse is a full-time student at least five months during the year while you are working
- Your spouse is physically or mentally unable to provide for his/her own care
- You are divorced or legally separated and have custody of your child even though your former spouse may claim the child for income tax purposes
Who is an eligible dependent?
Your dependent care expenses must be for a qualifying individual who spends at least eight hours a day in your home and is one the following:
- Your dependent under the age of 13 for who you can claim an exemption
- A child under the age of 13 for whom you have custody if you are divorced or legally separated
- Your spouse who is physically or mentally incapable of self-care
- Your dependent who is physically or mentally incapable of self-care, even if you cannot claim an exemption for the person for income tax purposes
What expense are eligible for reimbursement under the Dependent Care FSA?
Expense may be reimbursed for services provided:
Child and adult daycare, nursery and pre-school, after-school programs, summer day camp and taxes you pay on wages for eligible dependent care can be reimbursed through the Dependent Care FSA
What expenses are not eligible for reimbursement?
- Dependent care for a child 13 or over
- Overnight camp
- Babysitting that is not work-related
- School costs for kindergarten and higher grades
- Long-term care services
- All submitted expenses will be reviewed according to the regulations of Internal Revenue Code Sections 125 and 129
Can I pay my in-home daycare provider through the Dependent Care FSA?
Yes. You can be reimbursed from your Dependent Care FSA for any qualified daycare expense, whether performed in your home, the provider’s home or a daycare center. The caregiver’s Social Security number or tax identification number must be included on the Claim Form. You will also need to provide receipts for the expenses or have your provider sign the completed Claim Form.
My dependent care provider doesn’t claim the income as earnings. Can I use the dependent care account?
You can, but you will need to report the Social Security or tax identification number of your provider, along with the amount paid and benefits received, on Form 2441 to accompany your federal income tax return. As a result, your provider will have to pay taxes on that income.
My ex-spouse claims our child as deduction for tax purposes, but I pay for childcare. Can I use Dependent Care FSA?
During the time of the year the child resides with you, you can use the dependent care account to pay for childcare services.
Can I use both the Dependent Care FSA and the federal Child and Dependent Care Credit?
Expenses reimbursed from a Dependent Care FSA reduce the amount you can claim under the federal income tax credit. You will have to determine which approach is best for you. A worksheet is available to help you make your decision. Please call you FSA administrator if you would like a copy of the worksheet. Keep in mind the tax savings derived through participation in a Dependent Care FSA are realized throughout the plan year versus once on April 15.