When you enroll in a Flexible Spending Account (FSA), you set aside pretax money to pay for eligible healthcare and/or dependent care expenses. You never pay taxes on the dollars you set aside in an FSA, which helps you save cash.
McIlveen offers both a Health Care FSA and a Dependent Care FSA.
You can review the IRS rules and the maximum amounts allowed by visiting Healthcare.gov.
Health Care FSA allows you to set aside a certain amount to cover eligible health care expenses for yourself and your dependents. Eligible expenses include office visit copays, deductibles, orthodontia, vision expenses, and more.
Dependent Care FSA allows you to set aside a certain amount to cover eligible child care or adult day care expenses. Use this account to cover expenses related to babysitters, nanny services, licensed day care, preschool fees, before- and after-school programs, elder care services, and more.
The accounts are easy to use. For the Health Care and Dependent Care FSA, you file claims with Human Resources to get reimbursed in your paycheck.
For the plan year, expenses must be incurred January 1 through March 15, 20xx of the next year to be eligible for reimbursement. You have until March 31, 20xx, to submit claims for reimbursement. Any unused FSA funds are subject to the “use it or lose it” rule and will be forfeited.
To participate in the FSA, you need to enroll and choose the amount you would like to set aside each year. Only eligible expenses can be reimbursed under the FSA. These expenses are defined by IRS rules and your employer’s plan. You can learn about your employer’s plan by reading the
Only eligible expenses can be reimbursed under the FSA. These expenses are defined by IRS rules and your employer’s plan. You can learn about your employer’s plan by reading the Summary Plan Description (SPD).
Eligible health FSA expenses are those that you pay for out of your pocket for medical care that’s provided to you, your spouse, and eligible dependents. Generally, IRS rules state that medical care includes items and services that are meant to diagnose, cure, mitigate, treat, or prevent illness or disease. Transportation that is primarily for medical care is also included. Here are some examples:
- Your health plan deductible (the amount you pay before your plan starts paying a share of your costs)
- Your share of the cost for doctor’s office visits and prescription drugs
- Your share of the cost for eligible dental care, including exams, X-rays, and cleanings
- Your share of the cost for eligible vision care, including exams, eyeglasses, contact lenses, and laser eye surgery
For your children under age 13:
• Daycare • Summer day camp • Babysitting • Before and after school care • Housekeeper whose duties include child care
Non-medical care for any adult who is mentally or physically incapable of self-care, who you claim as a dependent on your tax return, and who lives with you, such as your:
• Parent, grandparent, or in-law • Spouse, sibling, or adult child
What happens if I have funds left in my health FSA at the end of the plan year?
The IRS created this rule, which states that all money left in your FSA is forfeited after the plan year ends, or if applicable, after the run-out period.
The unused portion of your health FSA cannot be paid to you in cash or other benefits, and you can’t transfer money between FSAs. To reduce your risk of losing money at the end of the plan year, carefully estimate your expenses when choosing your annual election amount.
When will I be reimbursed after I submit my reimbursement form to HR?
If you submitted your reimbursement form prior to the payroll cutoff date, you will be reimbursed on payday. If you submitted the reimbursement form after the payroll cutoff date, you will be reimbursed on the following payday.
Will I get a debit/credit card to use for charging my FSA expenses?
In 2016, we did not have the required number of employees participate in the FSA program to be able to outsource the administration of the program to a company that provides debit cards. Rather than not offer the program at all, we chose to self-administrator the program. This means that you pay for the expense up front, submit a form to HR for reimbursement, and you receive the reimbursement in your paycheck. We hope to have enough employee participation in the future to offer a debit card.
Can I make changes to my contributions during the year?
Your election can’t be changed during the plan year unless you have a change in status or other qualifying events – that’s an event defined by IRS rules – and your employer’s plan must allow the change as well.