Flexible Spending Accounts
An FSA is a great way to maximize your income. An FSA reduces your taxable income by setting aside pre-tax dollars to pay for eligible health care and dependent care expenses. Most participants save between 20% and 30%!
How Does It Work?
Begin by estimating your eligible expenses for the next plan year, and then decide how much you want from each paycheck to go into your Flexible Savings Account. Remember, you won’t pay taxes on the money you contribute to your FSA. This means you’ll save an amount equal to the taxes you would have paid on the money you set aside. You can use the Flex Spending Accounts Worksheet to help you estimate your costs for the upcoming plan year.
There are two types of Flexible Savings Accounts:
You can contribute an amount to your Health FSA that will be deducted evenly out of each paycheck on a pre-tax basis. These funds are then used for eligible healthcare expenses for you and your family, even if they are not enrolled in your group health plan. Eligible Health FSA expenses include medical, dental and vision expenses not covered by insurance; such as, doctor and prescription copays, dental expenses, vision expenses and drugs taken to treat a medical condition, but not for insurance premiums. See a list of FSA Eligible Expenses and an FSA Overview.
Dependent Care FSA
The Dependent Care Flexible Spending Account enables you to pay for out-of-pocket, work related dependent day-care cost with pre-tax dollars. If you are married, you can use the account if you and your spouse both work or, in some situations, if your spouse goes to school full-time. Generally an eligible child must be under age 13 and share your same principal residency for more than half the year. Under a special rule for dependent care expenses for children of divorced or separated parents, a child is an eligible dependent with respect to the custodial parent even when the noncustodial parent is entitled to claim the dependency exemption for the child. See the Dependent Care FSA Overview.
How Do I Use It?
You will receive a benefit card which acts as a debit card, giving you convenient and immediate access to funds in your flexible spending account. You can use these funds to cover eligible medical, dental, vision and/or dependent care expenses. See how to use your BPC Benefits Card.
FSA Limits, Grace Periods, and Carry-Overs
You can set aside up to $2,750 per year for a health FSA. Dependent care FSA caps will remain the same: $2,500 for an account holder is married and files a separate tax return, or $5,000 for an account holder who is married and files a joint tax return or files as single/head of household.
You generally must use the money in an FSA within the plan year, but you can carry over up to $500 per year to use in the following year. At the end of the year or grace period, you lose any money left over in your FSA. This means it’s important to plan carefully and not put more money in your FSA than you think you'll spend within a year on things like copayments, coinsurance, drugs, and other allowed health care costs.
Enroll or Re-Enroll
Unlike most other benefits, you must elect an FSA every year; your choice for the current plan year will not carry over. Ready to enroll or re-enroll? Download the 2020 Flexible Spending Account Enrollment Packet to get started. You can easily keep track of your spending, account balance, and other information by downloading the app; for more information, see the FSA Mobile App Information flyer. To ensure receipt of your FSA debit card by January 1, submit your enrollment packet to Rhonda Collins by Monday, December 16, 2019. You may enroll in the FSA program until December 30, but your debit card may be delayed until after the first of the year.