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