Page 11 - Leona Arizona Employment Group Flipbook
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Flexible Spending Accounts




          A Flexible Spending Account (FSA) helps you pay for health care or dependent care costs using tax-free dollars. Your contribution
          is deducted from your paycheck on a pretax basis and is put into the FSA. When you incur expenses, you can access the funds in
          your account to pay for eligible expenses. This chart shows the eligible expenses for each FSA and how much you can contribute
          each year. Each of these options reduces your taxable income.


           Account type         Eligible expenses                          Annual contribution limits
                                Most medical, dental and vision care expenses   Maximum contribution is $2,750 per year.
                                that are not covered by your health plan (such as
           Health Care FSA                                                 Funds are deducted throughout the year, but all
                                copays, coinsurance, deductibles, eyeglasses    funds are available on January 1.
                                and prescriptions)
                                Dependent care expenses (such as day care,   Maximum contribution is $5,000 per year
                                after school programs or eldercare programs)   ($2,500 if married and filing separate tax returns).
           Dependent Care FSA
                                for children under age 13 or eldercare so you and
                                your spouse can work or attend school full-time


                          Important information about FSAs

                          Your FSA elections are effective from January 1 through December 31. Claims for reimbursement must be
                          submitted by March 31 of the following year. Our Health Care FSA allows you to carry over $550 in unused
                          funds to the following plan year.
                          Please plan your contributions carefully. Rollover amounts must be used during the following plan year.
                          Any money in excess of $550 remaining in your account after December 31 will be forfeited. This is known as
                          the “use it or lose it” rule and it is governed by Internal Revenue Service regulations. Note that FSA elections do
                          not automatically continue from year to year; you must actively enroll each year.
                          Annual enrollment for FSA’s takes place in November each year for a January 1st effective date.
                          Remember to keep copies of your receipts with your tax records!



          The Advantages of an FSA
                                                                                        With FSA       Without FSA
          With an FSA, the money you contribute is never taxed—not
          when you put it in the account, not when you are reimbursed   Your taxable income   $50,000    $50,000
          with the funds from the account, and not when you file your   Pretax contribution
          income tax return at the end of the year. WEX is Leona’s FSA   to FSAs         $2,000            $0
          administrator.
                                                                 Federal and Social
          Once you are a participant, you can view your available balance   Security taxes*   $11,701    $12,355
          and claims information online at www.wexinc.com.
                                                                 After-tax dollars spent
                                                                 on eligible expenses      $0             $2,000
          Save on Your Taxes
                                                                 Spendable income
          At the right is an example of how much you can save when                       $36,299         $35,645
                                                                 after expenses
          you use the FSAs to pay for your predictable health care and
          dependent care expenses.                               Tax savings with Health Care and Dependent Care FSA: $654
          Keep in mind that because FSAs are not subject to FICA,   *This is an example only and may not reflect your actual experience. It assumes
          your overall Social Security benefits may be slightly reduced.   a 25% marginal federal income tax rate and a 7.65% FICA rate. State and local
                                                                taxes vary and are not included in this example.


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