Get the Full Benefits of Your FSA
A Flexible Spending Account (FSA) is an add-on benefit program that allows you to save money — on a pre-tax basis — for certain common, eligible expenses. If you choose to participate in this valuable benefit, you and your qualified dependents can pay for medical, dental and vision expenses as well as dependent care expenses tax-free. The net result is an increase in your take home pay.
Use this website page as a quick reference for questions you may have about your FSA plan through BeniComp. Please note this is meant to be an easy-to-read summary of the benefits available to you, not a contract. Additional limitations and exclusions may apply. For an official description of benefits, please contact the plan administrator.
Two Types of Accounts
The FSA plan consists of two accounts:
- Health Care Spending Account for eligible out-of-pocket medical, dental and vision expenses that are only partially covered or not covered by your plan, such as deductibles and co-pays, orthodontia, eyeglasses and eligible over-the-counter medications.
- Dependent Care Spending Account for dependent care expenses (daycare, babysitters, after-school programs, etc.) that allow you (or your spouse) to work.
More Money in Your Pocket
At the time of enrollment, you must determine how much you would like to contribute to each of the FSA accounts for the upcoming year. You may participate in one, both or none, depending on your personal needs and situation. That specific number of pre-tax dollars is deducted from your paycheck each pay period. When you contribute to an FSA plan, you lower your taxable income. Therefore you pay less each year in federal income and Social Security taxes and in most cases, state income taxes* while you increase your spendable income. Depending on your tax bracket, this plan can save you 30% to 40% on qualifying expenses.
Some Key Things to Note
Because of the tax benefits of an FSA, the IRS places strict guidelines on them:
The “use-it-or-lose-it” rule. Money left in your account at the end of the year cannot be rolled over to the next plan year and cannot be paid out to you.** Plan carefully when deciding how much you want to contribute.
- The IRS allows you to deduct healthcare expenses only if they exceed 7.5% of your adjusted gross income. If your total eligible out-of-pocket healthcare expenses do exceed that amount, you may prefer to claim them as itemized deductions on your tax return.
- You can use both the FSA and the tax deduction, but you may not claim the same expenses for both.
* Pennsylvania taxes contributions to Dependent Care Accounts. New Jersey taxes contributions to both Healthcare and Dependent Care Accounts.
** The IRS recently added an extension that allows participants to submit expenses for up to the first 2-1/2 months of the next year to help use up your FSA funds. Check with your employer to see if this extension is available to you.
Setting up and using an FSA is easy:
1. Determine how much money you need to set aside on an annual basis. Be sure to check the maximum and minimum amounts your plan allows.
2. Your employer will deduct the amount from your pay in equal amounts throughout the year on a pre-tax basis.
3. After you pay for an eligible expense, submit a claim to BeniComp for reimbursement:
BeniComp Group, Inc.
Attn: Flex Claims Dept.
8310 Clinton Park Drive
Ft. Wayne, IN 46825
You must include appropriate documentation to support your claim, such as an itemized receipt or an explanation of benefits (EOB) from your insurance company. Remember: Always keep copies!
4. Whenever possible, BeniComp will make arrangements with your medical and dental carrier to receive your claims electronically. That means no forms to file!
|FSA ANNUAL SAVINGS EXAMPLE*|
|With FSA Account||Without FSA Account|
|Pre-tax contribution to reimbursement account||($1,500)||$0|
|Federal income and social security taxes||($7,107)||($7,597)|
|After-tax dollars spent on eligible expenses||$0||($1,500)|
|Tax savings with the FSA||$490||$0|
- Co-payments, co-insurance and deductibles (but not premiums)
- Air conditioners, if medically necessary*
- Automobile equipment to assist the physically disabled
- Birth control pills
- Braille books and magazines
- Child birth classes
- Chiropractic visits
- Dental care
- Detoxification or drug abuse centers
- Diabetic supplies
- Expenses that exceed medical, dental or vision plan limits
- Eye exams, glasses and contact lenses
- Guide dogs for the visually or hearing impaired
- Hearing aids
- Household visual alert systems for hearing impaired persons
- Laser eye surgery
- Mattresses and boards, if medically necessary*
- Note-takes for hearing impaired child in school
- Orthopedic shoes
- Over-the-counter (OTC) drugs and medical supplies, such as allergy and cold medications, pain relievers and antacids
- Physical exams
- Physical therapy
- Prescription drugs
- Radiation treatments
- Remedial reading*
- Smoking cessation programs
- Specialized equipment for disabled persons
- Special devices for the visually impaired, such as a tape recorder and typewriter
- Speech therapy
- Sterilization surgery
- Transportation expenses related to medical care
- Water fluoridation services*
- Well-baby and well-child care
- Whirlpool baths*
- Wigs for hair loss due to a disease*
* These expenses require a doctor’s certification indicating the medical disorder, the specific treatment and how the treatment will alleviate the disorder.
Healthcare Spending Account Ineligible Expenses
- Cosmetic services
- Expenses you claim on your income tax return
- Expenses that are not tax-deductible
- Expenses reimbursed by other sources, such as insurance plans
- Fees for exercise or health clubs, unless medically necessary
- Hair transplants
- Illegal treatment, operations or drugs
- Insurance premiums
- Weight loss programs that are not medically necessary
Dependent Care Account Eligible Expenses
- Child care at a day camp, nursery school or by a private sitter for a child (13 years old or younger) that lives in your home at least eight hours a day
- Pre-school and after-school care (must be kept separate from tuition expenses)
- Care of an incapacitated adult who lives with you at least eight hours a day
- Expenses for a housekeeper whose duties include caring for an eligible dependent
A person you are claiming as your dependent cannot provide eligible dependent care services. You will need the social security number or tax identification number of the person or facility that provides the care.
Dependent Care Account Ineligible Expenses
- Education or tuition fees
- Late payment fees
- Overnight camps
- Sports lessons, field trips, clothing
- Transportation to and from dependent care provider