Flexible Spending Accounts
What is a Flexible Spending Account?
An FSA allows you to pay for qualified health care or dependent care expenses using tax free dollars deducted from your paycheck. You can choose to participate in the City’s Health Care FSA, Dependent Care FSA, or both. Both FSAs are administered by Employee Benefits Corporation (EBC).
Who is eligible to participate?
You do not need to participate in the City’s health insurance plan to participate in the Health Care FSA. Eligibility for participation in the Health Care FSA is effective the first of the month following two months of employment. Eligibility for participation in a Dependent Care FSA is effective upon the date of hire, but you and your spouse must be working, looking for work, or attending school full-time to participate.
How does an FSA work?
- You decide on a dollar amount you want to contribute to the FSA based on estimated out-of-pocket expenses for the upcoming plan year.
- The election amount is deducted pretax from your paychecks (prorated over 24 pay periods in the plan year) and held in the FSA.
- Use your FSA debit card (Healthcare FSA only) to pay for eligible expenses for yourself or your eligible spouse or dependents. You may also submit a claim via smartphone, fax, mail, or online.
- If you used your FSA debit card, payments are debited directly from your FSA account; If you submitted a claim, you are reimbursed for the incurred expenses from your FSA account
Frequently Asked Questions / Plan Comparison
|Frequently Asked Question||Health Care FSA||Dependent Care FSA|
|What kinds of expenses are eligible?||Eligible medical, dental, and vision expenses for you, your spouse, or dependents.||Daycare expenses or other custodial care for your tax dependents. Health care is not covered.|
|What is the minimum contribution?||$300||No minimum|
|What is the maximum contribution?||$2,850||$2,500 if married & filing separate tax returns;|
$5,000 if an individual or if married & filing jointly
|Can I change my election during the plan year?||Only if you experience a qualified change in status (change in marital status, number of dependents, employment, etc.).||Election amounts can be changed as dependent care costs change.|
|When do funds become available to use?||The entire amount is available on day one of the plan year or (for new employees) the date you become eligible.||Funds must accumulate before you can use them; you can only be reimbursed up to the amount you have in the account at any given time.|
|What happens to funds I don't use?||Up to $570 can be rolled over into the following plan year; additional unused funds are forfeited.||No rollover; unused funds are forfeited. There is an additional 2.5 month grace period to spend funds for anyone re-enrolling in the following plan year.|
How to Use Your FSA Debit Card
FSA debit cards are essentially the same a debit card you might have through your bank, but can only be used to cover eligible health care expenses.
For example, most pharmacies will accept a debit card for prescriptions or eligible over the counter items. Additionally, if you receive a medical bill in the mail from your provider (such as Aurora), you could write in your debit card information like you would a credit card, and the dollar amount of the bill will be deducted from your Health Care FSA account.
In certain instances, like a dental bill, you may be asked to provide documentation that the charge is an FSA eligible expense. Please provide the documentation promptly so you can continue to use your debit card. Debit cards cannot be used to reimburse for Dependent care expenses.
Additional Plan Features
Roll-Over: Healthcare FSA participants will be able to roll over up to $550 in unused Healthcare FSA funds to the next plan year, provided re-enrollment in the FSA has occurred.
Grace Period: Dependent Care FSA participants do not have a grace period; However, there is an additional 2.5 month grace period to spend funds for anyone re-enrolling in the Dependent Care FSA the following plan year.
Run-Out Period: All FSA participants will be able to submit a claim up to 2 ½ months after the plan year has ended. For Healthcare FSA participants, the date of service for the claim must be in the FSA plan year.