Benefits Plans - Flexible Spending Accounts: How You Benefit

The university's Flexible Spending Accounts add value and convenience to your health care and dependent care expenditures. They also reduce your tax bill. Here is an example of possible tax savings with an FSA.

* Potential tax savings shown for demonstration only. Actual savings will vary based on your individual tax situation. Please consult a tax professional for more information.

Here's how FSAs work:

1. Each year, you decide the amount you will contribute to your health care and/or dependent care flexible spending accounts. The amounts should cover your expected out-of-pocket health and/or dependent care expenses for the year. Use the online Savings Calculator to help determine how much to contribute.
2. The contribution amount you elect will be divided into equal amounts—24 if you are paid bi-weekly and 12 if you are paid monthly—and deducted from your paychecks. The deducted amount will be deposited into the appropriate flexible spending account. That amount will also be deducted from your taxable earnings and, therefore, not taxed.
3. As you and your eligible dependents incur eligible expenses, all you need to do is submit flexible spending claims. Your claim will usually be paid within ten business days from the date it is received by this plan's external claims processor, PayFlex/HealthHub. Or, use your PayFlex Card to pay for eligible health care expenses. With the card you will not need to file claim forms, but PayFlex will request itemized receipts to validate your expenses. Always ask for and retain itemized receipts.
4. You can claim amounts equal to your entire annual health care contribution from your Health Care Flexible Spending Account at any time during the year.
5. To receive a reimbursement from your Dependent Care Flexible Spending Account, you must have accumulated sufficient contributions to cover the claim being made.
6. You will not pay taxes on the amounts you contribute to either account, and your annual taxable income is reduced by the amount of your contribution.
7. One cautionary note: it is important to carefully — and accurately — predict your yearly out-of-pocket expenditures. Any amounts contributed to your account for which a flexible spending claim is not made by the deadline will be forfeited. In other words — use it or lose it!
8. You can file claims for pretax reimbursement of 2012 expenses through May 31, 2013. File claims for 2013 expenses by May 31, 2014.
9. Please read this information carefully to make sure you understand the key features of this valuable tax-saving program.

Next: Advantages of FSA Accounts