Flexible Spending Accounts (FSAs)
Flexible Spending Accounts (FSAs) allow you to pay for eligible expenses using tax-free dollars. Note: FSA are “use it or lose it”. If you do not spend all the money in your Healthcare or Dependent Care FSA by March 31 of the following year for expenses incurred from January 1 – December 31, unused dollars will be lost.
Healthcare FSA
Contribute up to $3,400 per year, pretax, to pay for copays, prescription expenses, lab exams and tests, contact lenses and eyeglasses. Employees enrolled in a HSA cannot enroll in a Health Care FSA during the same plan year. You cannot use your Healthcare FSA to pay for Dependent Care expenses.
Dependent Care FSA
Contribute up to $7,500 per year ($3,750 if married and filing separate tax returns), pretax, to pay for daycare expenses associated with caring for elder or child dependents that are necessary for you or your spouse to work or attend school full-time. You cannot use your Healthcare FSA to pay for Dependent Care expenses.
Transportation account information can be found under additional benefits.
How Much Could You Save?
When you contribute to an FSA, the money you set aside for eligible healthcare expenses is not taxed—meaning every dollar goes further. For example, let’s say Tom sets aside $2,000 in his FSA for the year.
Without an FSA, Tom Would Pay:
- 28% in federal income tax: $560 savings
- 5% in state income tax: $100 savings
- 7.65% in Federal Insurance Contributions Act (FICA) tax: $153 savings