Flexible Spending Accounts ( FSA )
Flexible Spending Accounts – Lower Taxes
Flexible Spending Accounts ( FSA ) allow the option to spend pre-tax dollars for out-of-pocket healthcare or dependent care expenses . Employees decide how much money will be taken out of each paycheck before paying taxes . Each dollar deposited into an FSA account is worth more than the taxed paycheck dollars . After paying for an eligible expense , submit a claim and be reimbursed with the pre-tax dollars from an FSA . Employees cannot change or stop payroll deductions during the year unless experiencing a qualified family status change . Annual enrollment is required to continue contributing to any FSA accounts .
The Health Expense FSA is used to pay for eligible out-of-pocket expenses , such as :
• Deductible , co-insurance and co-pays for medical , dental or vision coverage
• Retail and mail-order prescription co-insurance
• Any IRS deductible expense not covered by a health plan . Example : Lasik eye surgery
The Limited Purpose FSA pairs with the HDHP when employees also make contributions to an individual Optum Bank Health Savings Account ( HSA ). This FSA is used to pay for eligible out-ofpocket expenses for deductibles and co-pays for dental and vision claims ONLY .
The Dependent Day Care FSA is used for reimbursement of eligible day care expenses for a dependent who lives with you and is under age 13 ( or disabled at any age ). For a dependent ’ s care to be eligible , you must claim the person as a dependent on your income tax return . You may be reimbursed only for care that enables you to work , go to school full-time , or look for work on a full-time basis . You cannot be reimbursed for care provided by your spouse , your child under age 19 , or someone you claim as a dependent .
FSA Plan Termination : FSA plans end the last day of the month that your service with the City ends . Terminated or retired employee claims must be filed with UHC FSA division no later than 30 days after coverage ends . You may be eligible to elect continued after-tax payments for your FSA through election and payment of COBRA coverage for the balance of the current plan year .
FSA Claim Filing Extension : Active employees have a 2½ month extension to utilize FSA contributions remaining as of December 31 each plan year . Eligible claims incurred by March 15 may be submitted for reimbursement from the prior year ’ s plan balance . Active employee claims must be filed with UHC FSA division no later than May 31 .
Example : You have an FSA account balance of $ 200 on December 31 , 2019 . On January 15 , 2020 , you must pay out-of-pocket for eligible dental expenses totaling $ 150 . You would be eligible to file an FSA reimbursement claim for the $ 150 from your 2019 balance .
What expenses may I spend my FSA account funds on ?
• Healthcare = www . irs . gov / publications / p502
• Dependent Day Care = www . irs . gov / publications / p503
IMPORTANT Each FSA account is maintained as a separate account . IRS regulations do not allow transfers from one account to another .
How Much May I Contribute in 2020 to My FSA ?
Health Expense Limited Scope Dependent Day Care
Minimum Contribution = $ 260
Maximum Contribution = $ 2,750
Minimum Contribution = $ 260
Maximum Contribution = $ 2,750
Minimum Contribution = $ 260
Maximum Contribution = $ 5,000
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