FLEXIBLE SPENDING ACCOUNT (FSA) P&A GROUP What is a Flexible Spending Account? A flexible spending account (FSA) is an account that can reimburse you for qualified healthcare or dependent care expenses. You can fund qualified expenses with pre-tax dollars deducted from your paychecks. When electing an FSA, you will set an annual contribution amount. The goal is to choose an amount that will cover medical or dependent care expenses, but that is not so high that the money will be forfeited at the end of the year.
You can choose to participate in one or both accounts, and it’s not necessary to “sign up” specific family members for these accounts.
Healthcare FSA A healthcare FSA reimburses employees for eligible medical expenses, up to the amount contributed for the plan year. Eligible healthcare expenses include many of the out-of-pocket expenses you pay to maintain your health and well-being. Visit irs.gov for a full list of eligible expenses. You may contribute up to $3,050 annually (funds will be available as of the election effective date).
Dependent Care FSA You may use pre-tax dollars from your Dependent Care FSA to pay expenses for the care of a dependent child, spouse or elderly parent inside your home (from a qualified provider), and expenses outside your home, such as baby-sitters, nursery schools, or day care centers. You may contribute up to $5,000 annually (or $2,500 if you are married and file a separate tax return). You can only be reimbursed up to the amount that you have contributed.
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