A Flexible Spending Account is a great way to stretch benefit dollars.
Employees use before-tax dollars in their Flexible Spending Account (FSA) to reimburse themselves for eligible out-of-pocket medical and dependent care expenses. That means they can enjoy tax savings and increased take-home pay – all with the convenience of a prepaid benefits card. A Healthcare FSA allows reimbursement of qualifying out-of-pocket medical expenses. A Dependent Care FSA allows reimbursement of dependent care expenses, such as daycare, incurred by eligible dependents.
With an FSA, your employees can…
- Enjoy significant tax savings with pre-tax payroll deductions and tax-free reimbursements for qualified expenses.
- Quickly and easily access funds using the prepaid benefits card at point of sale, or request to have funds directly deposited to your bank account via our online portal or mobile app.
- Reduce filing hassles and paperwork by using your prepaid benefits card.
- Enjoy secure access to accounts using a convenient Consumer Portal available 24/7/365.
- Manage your FSA “on the go” with an easy-to-use mobile app.
- File claims easily online (when required) and let the system determine approval based on eligibility and availability of funds.
- Stay up to date on balances and actions required with automated email alerts and convenient portal and mobile home page messages.
- Get one-click answers to benefits questions.
How Does a FSA Work?
With an FSA, employees elect to have their annual contribution deducted from their paycheck each pay period, in equal installments throughout the year, until they reach the yearly maximum that you determined.
For 2020, they can contribute up to $2,750 for a Healthcare FSA, and up to $5,000 for a Dependent Care FSA.
The amount of their pay that goes into an FSA will not count as taxable income, so they will have immediate tax savings*.
FSA dollars can be used during the plan year to pay for qualified expenses and services.
*The amount you save in taxes with a Flexible Spending Account will vary depending on the amount you set aside in the account; your annual earnings; whether or not you pay Social Security taxes; the number of exemptions and deductions you claim on your tax return; your tax bracket and your state and local tax regulations. Check with your tax advisor for information on how participation will affect your tax savings.
Convenient Access 24/7/365
With the convenience of a mobile device, your employees can see their available balance anywhere, anytime. They can even file claims and upload receipts. With all FSA account types, employees receive access to a secure, easy-to-use web portal where they can track their account balance, view claims history, and submit requests for reimbursements. In addition, they will receive a convenient prepaid benefits card to make it easy to pay for eligible services and products not covered by health insurance.
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Is a Flexible Spending account right for your employees?
A Healthcare FSA could save them money if they or their dependents:
- Have out-of-pocket expenses like co-pays, coinsurance, or deductibles for health, prescription, dental or vision plans.
- Have a health condition that requires the purchase of prescription medications on an ongoing basis.
- Wear glasses or contact lenses or are planning LASIK surgery.
- Need orthodontia care, such as braces, or have dental expenses not covered by your insurance.
A Dependent Care FSA provides pre-tax reimbursement of out-of-pocket expenses related to dependent care. This benefit may make sense if they (and their spouse, if married) are working or in school, and:
- Their dependent children under age 13 attend daycare, after-school care, or summer day camp.
- They provide care for a person, of any age, whom they claim as a dependent on their federal income tax return and who is mentally or physically incapable of caring for him/herself.
