Flexible Spending Account (FSA)
What is a Flexible Spending Account?
A flexible spending account (FSA) is a form of cafeteria plan benefit funded by salary reduction, that reimburses employees for expenses insured for certain qualified benefits. An FSA may be offered for dependent care assistance, adoption assistance, and medical care reimbursements. The benefits are subject to an annual maximum and are subject to an annual “use-it or lose-it” rule. An FSA cannot provide a cumulative benefit to the employee beyond the plan year.
Unreimbursed Medical – (URM)
- Put pre-tax dollars aside via payroll deduction to cover medical expenses not covered by your health plan(s).
- No more filing claims – Debit card can be used at most major retail stores and pharmacies.
- Claim processing time is generally one to two days following receipt of claim documentation.
- Unreimbursed Medical (URM) limit annually – $2,500
- “Use it or Lose it” on URM
- Eligible expenses –medical/dental/vision co-pays and deductibles, orthodontia, diabetic supplies, Lasik surgery, prescriptions and more.
- Ineligible URM expenses – weight loss foods, anti-aging treatments, cosmetic surgery, and insurance premiums.
Dependent Day Care – (DDC)
- Put pre-tax dollars aside via payroll deduction to cover day care costs, summer camp, and care outside the home.
- Send in claim forms, receipts, and/or invoices for reimbursement.
- Dependent Day Care (DDC) limit annually – $5,000
- Eligible DDC expenses – a dependent disabled child age 13 years or older who must stay in the home at least eight hours a day, day care center expenses, a summer day camp for care.
- Ineligible DDC expenses – payments to an individual for whom you or your spouse is entitled to receive a personal tax exemption as a dependent: any of your children who are under age 19 at the end of the year in which the expenses were occurred.