Flexible Spending Accounts (FSAs)

Flexible Spending Accounts (FSA) administered by HSABank allow you to save taxes on out-of-pocket health care and dependent care expenses. Flexible Spending Accounts (FSAs) are a tax-free way to pay for your health care and dependent care expenses. The contributions you set aside are not taxed, so you save money.

Each year you would like to participate in the FSAs, you must elect the amount you want to contribute to either or both of the FSAs. Deductions will come from your paychecks in equal installments throughout the year and be deposited into your account(s). Both accounts function separately.

Health Care FSA – IRS Maximum $3,400/year

Your Health Care FSA will reimburse you for eligible expenses that you, your spouse, and your dependents incur during the plan year. The entire annual amount you elect can be used at any time during the plan year. When you incur an expense, you can use your HSABank debit card or pay out-of-pocket and submit a reimbursement request with documentation to be reimbursed.

Eligible health care expenses include copays, coinsurance, deductibles, prescription drugs, orthodontia, glasses/contact lenses, LASIK surgery, and much more. For a complete list, refer to IRS Publication 502: Medical and Dental Expenses, available at www.irs.gov/publications.

Dependent Care FSA – IRS Maximum $7,500/year

Your Dependent Care (or daycare) FSA lets you use pre-tax dollars to pay daycare expenses for children age 12 and under, or elder dependents unable to care for themselves. The care must be necessary for you and your spouse to remain employed. Care may be provided through live-in care, babysitters, and licensed daycare centers. You can be reimbursed only up to the amount available in your account.

Important Rules to Keep in Mind

FSAs offer tax advantages but are subject to strict IRS regulations, including the following:

• The IRS has a strict “Use it or Lose it” rule. If you do not use the full amount in your FSAs by the end of the 2 1/2 month grace period, you will lose any remaining funds.
• Once you enroll in the FSAs, you cannot change your contribution amount during the year unless you experience a qualified status change.
• Each account functions separately. You cannot transfer funds from one FSA to another.
• Don’t forget to keep your receipts! You may be required to submit receipts to show claims eligibility.
• If you’re unable to estimate your health care and dependent care costs accurately, it’s better to be conservative and underestimate rather than overestimate your expenses.

Make Your Money Work for You with an FSA