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Flexible Spending Accounts Overview

Important Note:

Effective January 1, 2011, reimbursements for over-the-counter, non-prescribed drugs will not be eligible for reimbursement. 

There are two types of Flexible Spending Accounts: Health Care and Dependent Care. The accounts are completely separate but are similar in that they allow you to set aside before-tax dollars to pay eligible health and dependent care expenses that other benefit plans don't cover.

The Accounts can help you pay for expenses that are predictable. They may offer savings, but you should plan carefully. Amounts left in either account at the end of the plan year (July 1 - June 30) are forfeited due to IRS Regulations.  We have signed a 2.5 month ammendment which allows you to utilize funds set aside for the July 1 - June 30 plan year from July 1 of the following fiscal year to September 15 of that new year.  For example, if you set aside $2,000 for plan year 7/1/12 - 6/30/13 and have $200 leftover, you may incur $200 from 7/1/13 - 9/15/13 and submit those claims to use up your $200 balance.  You have until November 30, 2013 to file those claims. 

Here’s how they work:

• You authorize payroll deductions before income and employment taxes are withheld; and
• When you have eligible expenses, you file your claims for reimbursement - from the tax free money you’ve set aside.

Although the two accounts are similar, they are different. Careful planning of the dollar amounts deposited into your accounts is encouraged, because any remaining balance at the end of the plan year cannot be refunded, transferred or carried forward.

Contribution Amounts

• You may contribute a minimum of $120 per plan year and a maximum $2,500 in a Health Care FSA.
  
• You may contribute a minimum of $135 per plan year and a maximum of $5,000 in a Dependent Care FSA.  Additionally, due to IRS regulations you are limited to $5,000 in a calendar year.