Unified Fire Authority

Flexible Spending Account

Using a Flexible Spending Account ( FSA ) is great way to stretch your benefit dollars . You use before-tax dollars in your FSA to reimburse yourself for eligible out-of-pocket medical and dependent care expenses . That means you can enjoy tax savings and increased takehome pay — all with the convenience of a prepaid benefits card .

WHAT IS AN FSA ? With an FSA , you elect to have your annual contribution ( up to the $ 2,850 limit set by the IRS ) deducted from your paycheck each pay period , in equal installments throughout the year , until you reach the yearly maximum you have specified . The amount of your pay that goes into an FSA will not count as taxable income , so you will have immediate tax savings . FSA dollars can be used during the plan year to pay for qualified expenses and services .

• A Healthcare FSA allows reimbursement of qualifying out-of-pocket medical expenses , vision and dental expenses .

• A Dependent Care FSA allows reimbursement of dependent care expenses , such as daycare ) incurred by eligible dependents .

With all FSA account types , you ’ ll receive access to a secure , easy-touse web portal where you can track your account balance , view your investment accounts and submit requests for reimbursements . In addition , you ’ ll receive a convenient prepaid benefits card to make it easy to pay for eligible services and products not covered by your health insurance . When you use your card , payments are automatically withdrawn from your account , so there are no out-of-pocket costs and you won ’ t have to submit receipts to verify the purchase . Just swipe and go . It ’ s that easy .

IS AN FSA RIGHT FOR ME ? An FSA is a great way to pay for expenses with pre-tax dollars . A Healthcare FSA could save you money if you or your dependents :

• Have out-of-pocket expenses like co-pays , coinsurance , or deductibles for health , prescription , dental or vision plans

• Have a health condition that requires the purchase of prescription medications on an ongoing basis

• Wear glasses or contact lenses or are planning LASIK surgery

• Need orthodontia care , such as braces , or have dental expenses not covered by your insurance

GRACE PERIOD The grace period allows you additional days beyond the end of the plan year to incur eligible health care expenses , therefore allowing you to incur expenses up until Dec 31 , 2022 for the 2021 plan year . In other words , you have a total of 17 months to utilize your 12- month election . Due to COVID the usage time frame is extended till 12 / 31 / 2022 for your 2020 and 2021 unused balances . How it works : All grace period expenses will be paid out of your “ prior ” plan year balance automatically , thereby helping you to “ use up ” your prior plan year balance first . Once the prior plan year balance is exhausted , the remaining claims will be applied towards the current plan year .

PLAN AHEAD Before you enroll , you must first decide how much you want to contribute to your account ( s ). You will want to spend some time estimating your anticipated eligible medical and dependent care expenses for the 2022 / 2023 plan year .

IS A DEPENDENT CARE FSA RIGHT FOR ME ? A Dependent Care FSA provides pre-tax reimbursement of out-of-pocket expenses related to dependent care . This benefit may make sense if you ( and your spouse , if married ) are working or in school , and :

• Your dependent children under age 13 attend daycare , after- school care or summer day camp

• You provide care for a person of any age whom you claim as a dependent on your federal income tax return and who is mentally or physically incapable of caring for himself or herself .

Be sure to estimate your healthcare expenses carefully as money left unspent in your Healthcare FSA at the end of the year will be forfeited if you are not able to spend it within the allotted grace period . Expenses incurred during the grace period are charged to the prior year ’ s balance before the current year ’ s money is used .

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