What is an FSA?
A Flexible Spending Account (FSA) allows you to set aside money out of your paycheck to pay for eligible expenses on a pre-tax basis (exempt from federal and state taxes). There are two types of FSAs available: a healthcare account and a dependent care account.
- Employees appointed to work 75% or higher FTE are eligible to enroll in FSAs during our annual Benefit Open Enrollment.
- The Healthcare FSA is available to all benefit eligible employees. Although, High Deduction Health Plan participants typically participate in Health Savings Account benefit.
- The Dependent Care FSA is available for all benefit eligible employees.
- Enrollment in a FSA is an annual election that expires at the end of the plan year. Re-enrollment is required to participate the following year.
- Enrollment in the FSAs is via the Online Enrollment through WINGS Express.
- You will select a per pay period amount which will be deducted from your paycheck over 12 monthly pays for salaried employees and 24 pay periods (2 pays per month) for biweekly paid employees.
- The only other time to take advantage of a FSA is within 31 days of experiencing a qualifying event, such as birth, marriage, loss of healthcare coverage, etc.
FSA Debit Card
- All enrollees in either the Healthcare and/or Dependent Care FSA accounts will receive a debit card to assist with any eligible payments from your account.
A healthcare FSA debit card covers eligible out-of-pocket healthcare expenses that you incur for yourself and/or your dependents. Your elected contributions are deducted from your paycheck on a “pre-tax” basis and, therefore, are subject to IRS regulations.
Common expenses that qualify for debit card use are:
- doctor visits,
- mental health care,
- diabetic supplies,
- dental services,
- chiropractor services,
- eye exams,
- You must have a prescription from your physician to use your debit card for qualified over-the-counter drugs and medicines (e.g. Advil, ibuprofen, cough syrup, etc.).
- Use of the debit card must be for qualified expenses that are incurred for yourself and/or your dependents as defined within the IRS regulations (please refer to www.irs.gov.)
For more information on the debit card set up and frequently asked questions, please review the “FSA Plan Details” and “FSA Brochure”.
Employee Contribution Limits/Carryover
- Maximum contribution is limited by the IRS to $2,750 for 2020. The IRS has not published the limit for 2021.
- Minimum contribution is $10 per month.
- Your entire annual election is available on your debit card as of January 1 of the plan year and can be used for healthcare expenses even though your payroll deductions have yet to occur.
- If you still have up to $550 remaining in your account at the end of the plan year, these funds will rollover into the next year, allowing you to continue to access these dollars in the next year. Any dollars remaining above the $550 will be forfeited.
- This up to $550 carryover is in addition to any current year election. For example, if you have $550 remaining from year 2020, and you elect to contribution $2,750 for year 2021, you have a total of $3,300 to utilize during year 2021. At the end of 2021, you will once again have an automatic carryover up to $550 into year 2022.
Employer Contributions/Health Management Initiative
- If you participate fully in the Health Management Initiative, Wright State University will contribute $400 to your Healthcare FSA account by the end of May 2021. This employer contribution is does not count towards your annual IRS limit. You are still able to contribute up to the maximum $2,750.
- If by chance you did not elect FSA for plan year 2021, then an account will be created on your behalf.
- For more details, please visit Health Management Initiative[sb1] for more details.
Dependent Care FSA
A dependent care flexible spending account can be used for work-related eligible childcare and elder-care expenses, that allows you, and if married, your spouse to work, seek employment, or attend school full-time. Your elected contributions are deducted from your paycheck on a “pre-tax” basis and therefore are subject to IRS regulations.
Common expenses that qualify for reimbursement are:
- before and after school programs,
- nursery school or preschool,
- summer day camp (not overnight)
- FSA debit card can only be used for qualified dependents, such as a child under age 13 and older dependents, such as a spouse, parent, or older child, who is physically or mentally incapable of caring for themselves, reside in your home at least 8 hours per day, and are claimed as your dependents for income tax purposes. Please refer to www.irs.gov for further dependent definitions.
- Your pay period election is available to you for reimbursement at the time it is deducted from each pay period.
- Services for dependent care can use the FSA debit card, or can be claimed as a Child Care Credit on your federal tax return, but not both. You may want to consult with a tax advisor to determine which method is best for you.
- Maximum IRS contribution limit is $5,000 per year ($2,500 for married filing separate) for 2020. The IRS has not published the limit for 2021. In addition, there are restrictions if your spouse’s income is below $5,000 or your spouse is a full-time student. Plus if your spouse is a participant in the same or another cafeteria plan, the combined total of Dependent Care FSA elections cannot exceed $5,000. Please refer to www.irs.gov for further clarification.
- Minimum contribution is $10 per month.
IMPORTANT: Any balance remaining in your Dependent Care FSA at the end of a calendar year will be forfeited.