Flexible Spending Account (FSA)

When you elect to contribute to a Healthcare or Dependent Care FSA, you decide, in advance, how much to contribute each calendar year. When you pay for eligible expenses, you can submit a claim form to be reimbursed. Because FSAs offer tax savings, the IRS has guidelines about how much you can contribute and what expenses are eligible for reimbursement.

There are three types of FSAs:

1. Healthcare Only

When you enroll in the Core Co-Pay or the Core Plus medical options, you may contribute a maximum of $2,400 per year to a Healthcare FSA. Money in this account can be used to reimburse yourself for a long list of IRS-approved medical expenses incurred by you and your family for the fiscal year, July 1 through June 31.

2. Dependent Care

This account can be used to reimburse yourself for eligible dependent child or elder care expenses for your qualified dependents. Eligible expenses are defined by the IRS tax code. If your spouse is a full-time student or incapable of self-care and you are utilizing the dependent care FSA, your payments are limited to the smallest of the following amounts:

You choose the amount that will be deducted (before taxes) from your paychecks and deposited into your FSA(s). When you have eligible expenses, you file claims and are reimbursed with tax-free dollars from your account(s).

Plan carefully!

Plan your expenses carefully. You are not allowed to change the amount of your deductions or terminate participation during the year unless you have a special mid-year change of status event. Also, as required by the IRS, you lose any money remaining in your account at the end of the year. Claims will continue to be processed for 90 days following the close of the year, but only for expenses incurred before the end of the year. After 90 days, any excess balances will be forfeited. Use the worksheet to estimate your health and dependent care expenses for the upcoming year.

When estimating your expenses, remember:

Eligible healthcare expenses

Healthcare expenses must be eligible expenses under Section 213 of the Internal Revenue Code. IRS Publication 502 has a complete list of eligible healthcare expenses. Generally, reimbursable expenses are those you could claim as a dependent on your federal income tax return.

Eligible dependent care expenses

Eligible expenses are those incurred for dependent care necessary so that you can be gainfully employed. IRS Publication 503 has a complete list of eligible dependent care expenses. Dependent care can be for any member of your household who is under age 13 and whom you could claim as a deduction on your federal income tax return or any adults who live with you at least eight hours a day, who are physically or mentally unable to care for themselves, and whom you claim as a dependent on your federal income tax return (for example, a spouse or elderly parent). Care services may be provided in your home or another location and incurred for dependent care-child or elder-when that care enables you or your spouse to remain gainfully employed, and rendered by someone who is not your dependent, your spouse, or your child and not under the age of 19.

Getting reimbursed

To receive tax-free reimbursement from your FSA(s), simply submit a claim form and the receipts for your eligible expenses. You will be reimbursed the full amount of every eligible claim you file, up to the total amount you elect to contribute for the year. For the Dependent Care FSA, you will be reimbursed in full only if sufficient money is in your account. Otherwise, you will receive reimbursement for the amount in your account and the balance when additional contributions are made to your account.

Tax considerations

You cannot claim a tax deduction for any healthcare expense reimbursed from your Healthcare FSA. You cannot claim a tax credit for any expense reimbursed from your Dependent Care FSA. The IRS determines the types of healthcare and dependent care expenses that are allowed for reimbursement from your tax-sheltered accounts.

Direct Deposit

If you signed up for a Flexible Spending Account, you have the option to sign up for direct deposit to have reimbursements automatically deposited to your account. Here's how it works: Request a direct deposit form . Complete the form and return it with a voided check to AmeriBen, PO Box 7186, Boise ID 83707. When you submit your claims to AmeriBen for reimbursement, they will transfer the funds directly to the checking or savings account you designate.

Complete details on how the FSA plan works is provided in the FSA Plan Document/Summary Plan Description .

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