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Table of Contents
A Flexible Spending Account (FSA) is a valuable employee benefit designed to put money in your pocket by providing a tax-advantaged way to pay qualified health and dependent care expenses.
Benefits of an FSA
You’ll pay less in taxes:
An employee with a salary of $24,000 per year can save approximately $373 in taxes by contributing $1,500 towards an FSA account (depending on the employee’s tax situation). Use the calculator to estimate your tax savings from enrolling in an FSA available at http://www.asiflex.com/calculator.html.
You’ll have more pre-tax money to spend on health care and dependent care expenses:
Because taxes are not withheld from your contributions, the actual amount deducted from your paycheck will be less than the amount you set aside.
Many out-of-pocket expenses are covered:
Health care expenses that are typically not covered under your health care plan, such as co-pays and deductibles can be paid from an FSA account and if you currently pay for day care for your children or adult dependents, you can use the dependent care account to reimburse yourself for these expenses.
How the Plan Works
By enrolling in an FSA, you can direct money, on a pre-tax basis, from your paycheck into a special tax-free account through regular, equal payroll deductions. When you incur a qualified expense, you submit a claim form and proof of payment to the plan administrator, ASI, who will then issue you a reimbursement check or direct deposit the reimbursement into your bank account. Claim forms can be downloaded from the ASI website at http://www.asiflex.com.
You have three months after the end of the calendar year to submit claims to ASI for eligible expenses incurred during the previous calendar year. To determine how much to contribute, make a list of the expected out-of-pocket medical and/or dependent care expenses for you and your dependents for the next calendar year. It is important to be conservative in your estimates, as any money you do not spend during the plan year will be forfeited.
Review the Participant Plan Information document, or refer to the Benefit Options Guide for more information.
Eligible Expenses
Co-pays, deductibles, eligible medical and dental expenses not covered by health plans, OTC drugs, and illness-related transportation expenses can be paid for through a Health Care Flexible Spending Account plan. The Dependent Care Flexible Spending Account plan can be used for day care expenses incurred while you and your spouse work or attend school full-time. For a more detailed overview of qualifying and non-qualifying expenses, refer to the ABOR Flexible Spending Account Plan Participant Plan Information at the links listed below.
Definitions
The information you will read here and in other Flexible Spending Account plan documentation refers to "dependent" and "qualifying person"; these terms are interchangeable and may differ from the definition of dependent for other health care programs.
For purposes of claiming expenses under the Flexible Spending Account Dependent Care plan, a qualifying person must be:
- Your dependent child who was under age 13 when the care was provided and whom
you can claim as an exemption on your Federal Income Tax return; or,
- Your dependent (child older than age 13, spouse, parent or other family member for
whom you have custodial responsibility who resides in your home) who was physically
or mentally not able to care for himself or herself AND whom you can claim as an
exemption (or could claim as an exemption except the person had $2,900 or more of
gross income). See Internal Revenue Service Publication 503 or contact your tax
advisor for additional information.
Health Care/Dependent Care Restrictions
- Health care expenses are limited to $5,000 per year.
- Dependent care expenses are limited to $5,000 per year per family ($2,500 if married filing separate Federal Income Tax returns).
- Your dependent care expenses must be for the care of one or more qualifying persons.
- If you are married, your spouse must also work or be a full-time student.
- You must provide ID numbers from your day care center or private provider for tax purposes.
- Your provider cannot be one of your own children under the age of 18.
- Changes to elections are not allowed during the calendar year, except for qualifying life events (e.g., birth of a child or employment status changes).
- You must request FSA changes within 31 days of a Qualified Life Event change. Refer to the Summary Plan Description for additional information on Qualified Life Event changes.
- Plan carefully. Be conservative with your estimates, as any money you do not spend during the plan year will be forfeited.
- Orthodontic expenses may be assumed to be incurred at the time a monthly payment is due and paid. These monthly payments must be spread out evenly over the expected period of orthodontic treatment. Refer to Participant Plan Information for additional information.
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