Flexible Spending Accounts (FSAs)

Flexible Spending Accounts (FSAs)

Make your money work for you.

Flexible Spending Accounts (FSAs), administered by Ameriflex, allow you to set aside pre-tax dollars to pay for eligible health care and dependent care expenses. Each year, you need to determine a pre-tax contribution amount, which will reduce your taxable income.

Health Care FSA – IRS Maximum $2,750/year

The Health Care FSA allows you to pay for eligible health care expenses incurred by you, your spouse/DP, and your children during the plan year. Eligible expenses include health plan copays, coinsurance, deductibles, orthodontia services, glasses, and more.

Note: Due to IRS regulations, HSA participants are not eligible to participate in the Health Care FSA.

Dependent Care FSA – IRS Maximum $5,000/year

The Dependent Care FSA lets you use pre-tax dollars to pay daycare expenses for children age 12 and under, or elder dependents who are unable to care for themselves. The care must be necessary for you and your spouse/DP to remain employed.

Eligible expenses include live-in care, licensed daycare centers, preschool, day camps, and more. Unlike the Health Care FSA, you can be reimbursed only up to the amount available in your account.

FSA Record-Keeping

You may be required to submit receipts and other proof in order to receive reimbursement for expenses you claim under the FSA. Make sure you retain all receipts, Explanation of Benefits (EOBs) and other documentation to ensure that you have the necessary proof to obtain reimbursement from your FSA, or in the event of an IRS audit.

For a complete list of eligible expenses, go to https://www.irs.gov/publications/p502.

FSA Rules to Keep in Mind

FSAs offer many tax advantages, but are subject to IRS rules:

  • All FSA expenses must be incurred during the plan year: January 1 through December 31.
  • The IRS has a “Use It or Lose It” rule. At the end of the calendar year, you may roll over up to $550 of unused health care funds. Any remaining funds above this amount will be forfeited.
  • You have until March 31 of the following plan year to submit a claim for reimbursement.
  • Once you enroll, you can only change your pre-tax contribution amount if you experience a qualified status change.
  • Each account functions separately. You cannot transfer funds from one FSA to another.