Flexible spending accounts are volunteer benefit plan arrangements that allow employees to pay for certain medical or dependent childcare expenses on a pretax basis. FSAs are referred to as reimbursement accounts since they operate by reimbursing employees for qualified expenses incurred during the plan year.
Benefit-eligible employees may enroll in an FSA as a new employee within 31 days of hire, or during open enrollment each October for the following calendar year. Re-enrollment is required each year that you wish to continue the plan.
Effective April 1, 2013 a new regulation goes into effect as part of the Dodd-Frank Wall-Street Reform and Consumer Protection Act that requiresconsumers to be provided with the ability to pay using a PIN (Personal Identification Number) at the point of sale, in addition to the current signature process. Keep in mind that the use of a PIN is not required to access your funds via the Benny prepaid benefits card. You can continue to use your Benny prepaid benefits card as you always have – no change required, simply by swiping your card and providing a signature. Click here for details.
The Healthcare Flexible Spending Account allows for certain out-of-pocket healthcare expenses to be paid for on a pre-tax basis. Participant elections are payroll deducted and placed in a special account for reimbursements to be issued as claims are incurred. Participants are able to receive their full election amounts anytime during the plan year.
There is no income tax reporting required when participating in this account. The payroll deductions are free of federal and state taxes and do not even appear on a W-2 as reported income. The maximum annual election is $2500 for 2013.
Reimbursements are received by faxing, emailing or mailing claims and supporting documentation to Chard Snyder. Supporting documentation may be a receipt, a bill, an explanation of benefits summary (EOB) and/or any documentation that provides the date of service, the type of service and the amount. After the claim has been reviewed and the expense approved, payment is then issued to the participant via direct deposit or a check. Claims are processed daily and payments are issued at least once per week. Expenses can also be paid using a Benny™ Prepaid Benefit Debit Card.
Reimbursements are only issued for eligible expenses incurred by the participant, their spouse/same-sex domestic partner or their eligible dependents. Any funds remaining in the account at the end of the plan year and after the corresponding 2 ½ month grace period are forfeited.
FSA - How can it save money? (PDF 30KB)
FSA - How it Works (PDF 31KB)
Grace Period (PDF 19KB)
Limited FSA (if you also have a HSA) (PDF 94KB)
The Dependent Care Flexible Spending Account allows for certain out-of-pocket daycare expenses to be paid on a pre-tax basis. Participant elections are payroll deducted and placed in a special account for reimbursements to be issued as claims are incurred. Participants may receive reimbursements up to the total amount contributed through payroll deductions, but not more than their current account balance. Participants cannot change their individual elections unless they experience a qualifying event: birth, death, marriage, divorce, loss of spouse coverage, or dependent child no longer eligible.
Payroll deductions from this account are free of federal and state taxes. Employees who participate in the Dependent Care FSA will see their pre-tax deductions represented in box 10 of their W-2. In addition, participants will be prompted to supply information about their daycare provider (name, address and tax ID number) on Form 2441 or Schedule 2 of their income tax return. Please consult a tax professional for questions regarding income tax preparation.
The maximum annual election is $5000 for 2013.
Reimbursements are received by faxing, emailing or mailing claim forms and supporting documentation to Chard Snyder.
Reimbursements are only issued for eligible expenses incurred by participants' dependents. Any funds remaining in the account at the end of the plan year and after the corresponding 2 ½ month grace period are forfeited.
Participant elections for the Dependent Care FSA are also limited by IRS requirements.
CHARD, SNYDER & ASSOCIATES
3510 Irwin Simpson Rd
Mason, OH 45040