What is a 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 with a 51% 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 with one exception. High Deduction Health Plan participants are not eligible – these employees should refer to the 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. No paperwork is required.
- 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.
How the FSAs Work
The Internal Revenue Service (IRS) requires that expenses need to be paid first before you are entitled to reimbursement from your FSA. Therefore, to receive payments from your account, you will need to have proof of this expenditure by submitting copies of either the payment or an explanation of benefits.
Reimbursement from your Account
- Reimbursements are made via direct deposit from My Cafeteria Plan to your designated bank account.
- You have until March 31 of the following year to receive reimbursement of expenses incurred during the plan year, January 1 through December 31. Claims submitted after this deadline will not be reimbursed.
- Balance remaining in your Healthcare FSA over $500 will be forfeited with any balance up to $500 becomes a carryover into the next calendar year, to be available for reimbursement for next year’s expenditures.
- Balance remaining in your Dependent Care FSA will be forfeited.
A healthcare FSA allows for reimbursement for out-of-pocket healthcare expenditures that you incur on behalf of 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. The following summaries important facts regarding this benefit:
- Common expenses that qualify for reimbursement are: doctor visits, deductibles, co-payments, co-insurance, prescriptions, mental health care, diabetic supplies, dental services and orthodontics, chiropractor services, eye exams, glasses and contacts. For a complete listing of eligible expenses, please visit www.myCafeteriaPlan.com or www.irs.gov.
- You must have a prescription from your physician to be reimbursed for qualified over-the-counter drugs and medicines (e.g. Advil, ibuprofen, cough syrup, etc.).
- Reimbursements from this account must be for qualified expenditures that are incurred for yourself and/or your dependents as defined within the IRS regulations (please refer to www.irs.gov.)
- Maximum contribution is limited by the IRS to $2,700 for 2019.
- Minimum contribution is $10 per month.
- Your entire annual election is available in your account as of January 1 of the plan year and can be used for reimbursements even though your payroll deductions have yet to occur.
- If you still have up to $500 remaining in your account at the end of the plan year, these funds will rollover into the next year, allowing you until the end of the second year to utilize these dollars for expenses incurred in the second year.
- This up to $500 carryover is in addition to any current year election. For example, if you have $500 remaining from year 2018, and you elect to contribution $2,650 for year 2019, you have a total of $3,150 to utilize during year 2019. Also, at the end of 2019, once again you have automatically carryover up to $500 into year 2020.
Dependent Care FSA
A dependent care flexible spending account can be used for work-related eligible child-care 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. The following summaries important facts regarding this benefit:
- Common expenses that qualify for reimbursement are daycare, before and after school programs, nursery school or preschool, summer day camp (not overnight) for children up to age 13 and adult daycare. For a complete listing of eligible expenses, please visit www.myCafeteriaPlan.com and/or www.irs.gov.
- Reimbursements form this account must be 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.
- Maximum IRS contribution limit is $5,000 per year ($2,500 for married filing separate) for 2018. The IRS has not published the limit for 2019. 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.
- Your pay period election is available to you for reimbursement at the time it is deducted from each pay period.
- Also, services for dependent care can be reimbursed from a FSA, 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.
Further questions about Flexible Spending Accounts can be directed to www.MyCafeteriaPlan.com, or 1-800-865-6543.
Disclaimer: The benefits information contained in this site provides a summary for employees of Wright State. This information does not list all the provisions and does not supersede the individual provisions of our group insurance contracts, benefit plans and university policies that it describes. Similarly, the information presented does not guarantee that the university, the state of Ohio, and/or others responsible for these contracts, plans, programs, and policies will not make future changes in the provisions applicable to each.