A Flexible Spending Account (FSA) is a benefit provided by the employer which allows participants to contribute an elected amount of their gross income to a designated account or accounts before taxes are deducted. (Employers can also fund FSAs). These accounts are for medical, dependent care, transportation, or adoption expenses not covered by insurance, from which participants can be reimbursed throughout the plan year or claim period. An FSA allows participants to reduce their gross income, thereby reducing the amount paid in Federal, Social Security and some State & Local taxes resulting in a savings of between 25% and 40% of every dollar contributed to the plan.
Below you will find more information on the following topics: Health FSAs - Dependent Care FSAs - Limited Purpose FSAs - Transportation Accounts - Adoption Accounts - How the Plan is Funded - Submitting Claims - Reimbursements
Allows you to pay for certain out of pocket medical expenses on a pre-taxed basis. Eligible expenses are those that aren't covered by insurance (for example, annual deductibles, office co-payments, prescriptions, over-the-counter drugs and orthodontia). A more in depth list can be found HERE. With a Health FSA you can elect up to $2,550 (unless otherwise specified by your employer) and the total amount of your election is available from the first day of the plan year. For example if you elect $1,000 for a plan starting January 1st, and you go to the eye doctor and get new glasses for $400 on January 23nd, the money is available to you to use even though you didn't contribute it to the plan yet.
Dependent Care FSA
Qualified dependent care expenses may include the care of a child under the age of 13, long-term care for parents, and care for a disabled spouse or a dependent incapable of caring for themselves. To be eligible they have to be a qualified dependent to you as determined by the IRS. You can elect up to $5,000. The elected amount is available to you pre-tax as you contribute it to the account. Dependent care FSAs can be used for Day Care, Summer Camps (no overnight) or any other period that the supervised care is allowing you and your spouse (if applicable) to work or go to school.
Important things to know about FSAs
- Claims can be for you, your spouse, or dependent(s) expenses
- You are eligible to participate, regardless of your health insurance participation (if you or your spouse have an HSA read the Limited Purpose FSA section below).
- You and your spouse can both elect Health FSAs
- Dependent Care FSAs have a limit of $5,000 per family
- If you are debating using the Dependent Care FSA vs Child Tax Credit, you can use our calculator HERE to see which is more beneficial
- Save all receipts even if using Debit Card
- Don't throw away your Debit Card when your election is all used, Cards are good for multiple years
Limited Purpose Flexible Spending Account
A Limited Purpose Flexible Spending Account (LPFSA) reduces your taxable income and gives you an opportunity to use your pre-tax dollars for certain health care costs the same as the standard FSA.
The main difference between a general FSA and a LPFSA is that only dental, vision, and certain preventive care expenses are eligible with the LPFSA.
The LPFSA allows you to be reimbursed for expenses incurred by yourself, spouse, or eligible dependent(s). Your spouse and dependent(s) are also limited to the restrictions of a LPFSA.
A few examples of covered items:
· Dental: Co-payments/deductibles, Cleaning, Fillings, Crowns, Orthodontia
· Vision: Contact lenses, Eyeglasses, Refractions, Vision correction procedures
· Preventive Care
Important points to note:
· If you enroll in the HSA you can only enroll in the LPFSA.
· The limited restrictions of the LPFSA apply to all family members
Section 132 Qualified Transportation Plan
A Section 132 Qualified Transportation Plan allows you to set aside pre-tax dollars from your paycheck to pay for work-related Mass Transit and Parking related expenses. Your employer must be participating for YOU to be able to participate. Through your participation you can save on average 25% on these expenses. You will avoid any Federal and FICA taxes on your plan contributions. Remember, these are expenses you are paying with or without the plan; why not pay with tax-free dollars? Expenses for commuting to and from work, for:
Parking: Parking your vehicle in a facility that is near your place of work or parking at location from where you commute to work. (Does not pay for parking at your residence)
Mass Transit: Includes passes, token, fare card, voucher or other items that allows you to use mass transit for the purpose of traveling to or from work such as bus, subway, train, ferry, etc. or the cost of a qualified vanpool.
How much can I set aside with pre-tax dollars?
The maximum amounts for 2013 are $245/month for Parking and $245/month for Mass Transit. Please note: Per IRS guidelines you can only be reimbursed for what you have already contributed to the account. If your claim exceeds more than available balance you will receive addition reimbursements as your plan contributions are made.
How the Plans Work
Can I use the mySourceCard MasterCard?
If your company offers the mySourceCard you can use it for Medical/Health FSA, Dependent Care FSA and expenses Qualified Transportation or Parking Expenses.
How Is the Elected Amount Paid For?
The plans are funded by payroll deduction. Simply take the amount you want to elect, divide by the number of pays you have, and that amount will be deducted from your paycheck throughout the year.
If you do not use the mySource Debit Card, you can submit claims as the expenses are incurred or all at once. To submit expenses to us for reimbursement, fill out a claim form and attach receipts. You can mail, email, fax, or submit claims online. We also have a Mobile App. you can submit claims through. You can find more about the App. here. Further instructions are on the claim forms found here.
Receipts need to be more than a credit card receipt. They need to show: Who service was for, Date of service/purchase, Item/service and Amount.
To submit by:
- Mail:Alternative Benefit Systems PO Box 349 Blandon, PA 19510
- Fax: (855) 414-6965
- Online: Through the user portal at the top right of the screen. If you haven?t registered prior you need to contact us and tell us your employer firstname.lastname@example.org
- Mobile App. You must be registered for the online user portal, and use that user name and password to login to the app.
We process claims daily, and strive to have your reimbursement back to you ASAP.