A Flexible Spending Account (FSA) is an account that allows employees to set aside pre-tax dollars to pay for qualified health care or dependent care expenses. This plan is administered by P&A Group. At the beginning of each plan year, the employee decides how much to contribute to the FSA, and that amount is deducted over the course of the plan year. Access to the total amount of funds is immediate, meaning the entire amount can be accessed as soon as the plan year begins. However, unused dollars left in the FSA at the end of the plan year are forfeited because IRS regulations do not allow FSA funds to roll over from one year to the next. Plan carefully when deciding how much to contribute to avoid forfeiting amounts unspent at the end of the plan year.

Employees and covered dependents(s) do not have to be covered under the state’s medical plans to participate in an FSA.

Health Care Flexible Spending Account

The Health Care Flexible Spending Account (Health Care FSA) is used for out-of-pocket health care expenses not paid by insurance. Such expenses include deductibles, copays, coinsurance, prescription, dental, and vision, for yourself, your spouse, and all dependents you can claim on your tax return. Dependent children must be under age 27 at the end of the tax year. You may contribute between $120 and $3,200 a year to reimburse yourself for eligible out-of-pocket health care expenses.

Dependent Care Spending Account

The dependent (day) care Flexible Spending Account (DFSA) is designed to give you a tax-saving way to pay for these expenses. This account works much like the health care reimbursement account — with a few twists. It is important to remember that the dependent day care expenses must meet certain IRS requirements. The expenses must be necessary for you to continue working. If married, you and your spouse must both be working, or your spouse must be a full-time student or disabled. To be considered a “dependent,” the person receiving care must be eligible to be claimed as your dependent on your federal income tax return and be either:

• under the age 13; or
• your spouse or other dependent who is physically or mentally incapable of self-support, and who spends at least eight hours per day in your home.

IMPORTANT NOTE: If you retire or terminate employment or lose benefits eligibility during the plan year, you may only seek reimbursement for claims incurred through your last day of employment. You have 90 days from the date of your termination to submit claims for reimbursement. Remaining unused funds will be forfeited.