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All About Flexible Spending Accounts

On the Road with the OHR Health Insurance Team
by

M Mason

on 12 October 2015

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Transcript of All About Flexible Spending Accounts


Why enroll in an FSA?
Answer:
You give yourself a raise by reducing your taxes!

First, you contribute money to your FSA account
before
taxes are taken from your paycheck

Then, you use your FSA account to pay for eligible "out-of-pocket" health care and day care expenses

Permanent full-time and part-time Montgomery County Government employees are eligible to participate

Health Care FSA

maximum annual contribution per family: $2,500 ($2,550 for 2016)

minimum annual contribution: $100

For your family's out-of-pocket health care expenses

Can use for yourself, your spouse, and dependents up to
age 26 – even if you and your family are not enrolled in a County health plan

Some expenses require a doctor's prescription or physician's statement, such as vitamins for a diagnosed condition

Some expenses are
ineligible
, such as:

teeth whitening
cosmetic surgery
health club dues
insurance premiums
Dependent Care FSA
maximum annual contribution: $5,000
(max if married and filing separately: $2,500)

minimum annual contribution: $100

Used to pay for day care services

Eligible dependents are tax dependents who are:

under age 13, or
age 13 or older if physically or mentally incapable of self-care and residing in your home at least half the year



FlexExpress card

Set of 2 cards mailed late December to new participants
Be careful not to discard as junk mail
Use the same card for both FSAs
Good for 3 years (as long as you re-enroll each year); automatically mailed before expiration date
Because the card has no PIN, choose "credit" if asked by pharmacy or service provider whether to run as debit or credit
Mobile apps
Download the mobile application for iPhone, Android and tablet devices to access account information on the go, including filing claims
Then, use your device’s camera to photograph your documentation and upload it through the app!
How to file FSA claims
You have 4 convenient options

Download and use one of the mobile apps
Use the FSA debit card
Scan and submit your receipts online
Complete a paper claim form and submit via fax, secure email or mail

Typical turnaround time: 3 to 5 days

Example of tax savings
Important points recap
You need to
re-enroll
every Open Enrollment

Keep all receipts

The Dependent Care FSA can only be used for dependent
day care
expenses – not for the
health care
expenses of your dependents
FLEXIBLE SPENDING ACCOUNTS (FSAs)
Really important point #4: Don't toss those receipts!

Benefit Strategies may request a receipt to verify a card transaction

You may need them for tax reporting purposes
Annual earnings

Annual FSA election

Taxable income

Approximate taxes paid*

Annual tax savings
w/o FSA

w/ FSA

$36,000

$0

$36,000

-$9,954

$0
$36,000

-$1,500

$34,500

-$9,539

$415
*approx. taxes paid based on 27.65%
Part 1:

FSA benefits
(and rules)

Really important point #2:

The Dependent Care FSA can only be used for dependent
day care

expenses –
not for the health care

expenses of your dependents.
Part 2:
Cool tools

The Benefits Strategies online calculator can show you estimated tax savings and help you plan how much to elect each year
Benefit Strategies website
FlexExpress card


Health Care FSA: Pre-loaded with full annual amount

Dependent Care FSA: Carries only the amount you have contributed so far to your Dependent Care FSA

Many ways to check your balance:
online website, online chat, mobile app, telephone system or customer service
FlexExpress card
How it works

1. Present your FlexExpress card to pay for eligible items

2. If also buying ineligible items (e.g., at a pharmacy), present another form of payment for the ineligible items

3. You may need to submit a receipt at a later point...
FlexExpress card

Where you can use your card

Medical, dental, vision and retail pharmacy settings and that accept VISA

Mail order pharmacies that accept VISA

Dependent care settings that accept VISA
FlexExpress card
Some FSA-eligible items/services cannot be
purchased with the FlexExpress card:

Prescribed over-the counter (OTC) medicine, such as OTC allergy medication or baby aspirin to treat a heart condition – these require a doctor's prescription
Dual use items, such as vitamins to treat a diagnosed condition (not for preventive care) – this requires a physician's statement (on Benefits Strategies website)


Need to submit above type items via website or form
Important points recap
2015 participants:
Incur expenses by
3/15/2016
Send claims to Benefit Strategies by
4/30/2016

2016 participants:
Incur expenses by
3/15/2017
Send claims to Benefit Strategies by
4/30/2017

Use it or lose it:

Under IRS rules, any unclaimed money left in your FSA account is forfeited!
Benefit Strategies website
Secure account access
Upload documentation and file for reimbursement
View claims history and account balances
Link your bank account to your FSA account for direct deposit of claim money
Set up text message alerts
Obtain claim forms and plan materials
FSA resources
Website:
www.benstrat.com
Email:
info@benstrat.com
Fax:
603-647-4668

Phone:
1-888-401-FLEX (3539)
Automated phone system:
24/7
Customer service / live chat:
Monday to Thursday: 8:00 am to 6:00 pm ET
Friday: 8:00 am to 5:00 pm ET

This presentation:
www.montgomerycountymd.gov/OHR
(Go to the Benefits tab at top left and
choose Employee Health Insurance, then go to the FSA section)
See flyer handout for details,
or visit www.benstrat.com
Availability of FSA funds

Health Care FSA:
Your full election amount is available on the first day of the plan year

Dependent Care FSA:
Your funds are available as they accumulate through payroll deductions
Really important point #1
You can only enroll in an FSA during the fall Open Enrollment period (effective January 1st of the next plan year) unless you have an applicable change of status such as:

marriage
birth of a child
spouse changing jobs



You must re-enroll each year during Open Enrollment. Place a tickler on your calendar!
Generally, you cannot
change or cancel your election.
Really important point #3:
Be aware of the deadlines to incur and submit FSA claims!

Claims must be submitted by April 30th of the following year
Expenses must be incurred during the calendar year; however, the County offers a grace period ...
If you elect to participate
for 2016:

The plan year runs 1/1/2016 - 12/31/2016

3/15/2017 is the last day to incur 2016 expenses (due to grace period)

4/30/2017 is the last day to submit 2016 claims to Benefit Strategies
Super important:
Under IRS rules, any unclaimed money left in your FSA account is forfeited. Also known as the "use it or lose it" rule.
Health Care FSA:

Examples of
eligible expenses

acupuncture
bandages
band-aids
blood pressure monitors
chiropractic care
cholesterol meter test kit
CPAP machines (sleep disorders)
crutches, canes, walkers
diabetic monitors and supplies
fertility monitors
first aid kits
orthotics
orthopedic shoes
pregnancy tests
thermometers
wheelchairs

Dental

dental care
dentures
orthodontia

Vision

Braille books for people who are blind
contact lenses
contact lens supplies
eye exams
eye glasses
guide dogs for people who are blind
Lasik eye surgery
reading glasses

General
For medical, dental, vision and
hearing services:

coinsurance
copayments
deductibles
mileage to appointments


Over-the counter items with Rx:

acne treatments
allergy/sinus/asthma medicines
cold/flu/cough medicines
diaper rash ointments
glucosamine
laxatives
sleep aids
.
..and much more!








hearing aids
hearing aid batteries
hearing care
Medical
Hearing
Dependent Care FSA
Eligible expenses:

day care centers and nursery schools
before/after school programs
summer day camps
adult day care centers
babysitters including nannies, inside or outside the home–
relatives must be over 19 and not be claimed on your federal tax return
non-relatives can be under 19
Ineligible expenses:

kindergarten
private school tuition
educational classes
overnight camps
IRS Child Care Credit

Generally, a combined family adjusted gross income of $40,000 or higher will see a greater tax savings through the Dependent Care FSA than the IRS Child Care Credit

Cannot use both the Credit and Dependent Care FSA

Review the comparison flyer (shown at right) at www.benstrat.com

Consult with a tax advisor for details on your particular tax situation



The County expects to continue its group insurance plans, but it is the County’s position that there is no implied contract between employees and the County to do so, and the County reserves the right at any time and for any reason to amend the terms of the plans or terminate the plans, subject to the County’s collective bargaining agreements. The County may also amend the plans at any time, either prospectively or retroactively, as required by federal law.

Legal information
How it works


1. You elect the annual amount you want to place in your FSA(s) for the upcoming plan year

2. That amount is divided by 26 and taken from your biweekly paychecks on a before-tax basis

3. You access your FSA funds throughout the year to pay for eligible expenses





Thank you
We hope you have enjoyed learning about FSAs, which are part of your overall
health insurance package.


–Your OHR Health Insurance Team
The FSA administrator is...
What's new for 2016...
The annual contribution limit for the Health Care FSA has increased $50 to $2,550 beginning January 1, 2016.
If you currently participate
for 2015:

The plan year runs 1/1/2015 - 12/31/2015

3/15/2016 is the last day to incur 2015 expenses (due to grace period)

4/30/2016 is the last day to submit 2015 claims to Benefit Strategies
Full transcript