Benefits Enrollment & Reference Guide - Harford County Public ...

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Benefits Enrollment & Reference Guide - Harford County Public ...

Flexible Spending Account (FSA) Highlights

How FSAs Work

During open enrollment (or when you first become

eligible) you decide how much you want to contribute

from your pay to a FSA. You can establish a FSA for

your health care expenses and/or for your dependent

care expenses. Note that health care FSAs and

dependent care FSAs are two separate accounts, and

not interchangeable.

When you enroll, you authorize your employer to

deduct a certain portion of your earnings each pay

period, before taxes. Your contributions are set aside

in your FSA throughout the year via payroll deduction.

When you have an eligible expense, you can use

your FSA debit card or pay the cost up front and be

reimbursed from your account. Remember, you do

not pay taxes on the money reimbursed to you from

your Flexible Spending Account.

You can contribute up to $5,000 a year to the dependent

care FSA (or $2,500 a year if you are married but file

a separate tax return from your spouse). You can

contribute up to $5,000 a year to the health care FSA.

If you have money left in your account at the end of

the plan year, it cannot be returned to you nor carried

over to the next plan year. For strategies on using

your account balance, see Planning Your Election.

Important Flexible Spending

Accounts Information

IRS regulations impose a “use it or lose it” rule that

requires you to forfeit any money not used by the end

of the Plan Year. HCPS can neither refund money to

you nor carry it forward from one Plan Year to the next.

You must re-enroll in FSAs each Plan Year, even if you

keep the amount of your contributions the same.

You may participate in one or both of the Flexible

Spending Accounts, but the Health Care and Dependent

Care spending accounts are separate. Money cannot

be transferred from one account to the other.

You may choose either the pre-tax advantage of the

dependent care spending account, or claim a tax credit

on your federal income return, but you may not do both.

Consult your tax advisor to determine whether the FSA

or the tax credit gives you the greater tax advantage.

New hires (or enrollments due to a qualified life event)

joining the plan after the beginning of the Plan Year

should determine how many payroll deductions for

benefits remain before deciding upon the amount to

set aside in FSAs. Payroll deductions are taken from

24 pays for 12-month employees and 20 pays for

10-month employees. July 1 or September 1 - June 30.

Planning Your Election

Here are just a few strategies you can use to be sure

that you are making every penny count in your FSA!

Plan ahead when enrolling.

Base your contribution on your anticipated expenses for

the plan year which are not covered by other insurance

or benefit plans.

Look back to last year.

One way to estimate those expenses is to look back at

the health care and dependent care expense you paid

out of your own pocket during the past year. This can be

the starting point for your annual contribution, adjusted

of course for any past or future extraordinary expenses.

Use the on-line worksheet.

For an online worksheet, visit www.hfsbenefits.com.

Look outside your health plan.

Many health care plans offer some, but not full, coverage

for certain expenses such as laser eye surgery, orthodontia,

over-the-counter (OTC) medicines*, etc.

Evaluate your home pharmacy.

Start by throwing away all expired over-the-counter

(OTC) medications. Then, the next time your visit your

health care provider, ask for a prescription for the OTC

medications you use on a regular basis. These may

include allergy medications, antacids, cold medications,

pain relievers. Bandaids, ace bandages, contact lens

solutions, and other OTC items (non-medication) can be

reimbursed without a prescription.

Be Conservative.

Any unused funds cannot carry forward to the next plan

year and are forfeited.

* Important: Effective for all purchases made after January 1, 2011, all

over-the-counter (OTC) drugs and medicines will require a prescription

for reimbursement.

52 Harford County Public Schools – Benefits Enrollment & Reference Guide

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