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Flexible Spending Accounts

Flexible Spending Accounts (FSAs) are designed to save you money on your taxes. They work

in a similar way to a savings account. Each pay period, funds are deducted from your pay on a
pretax basis and credited to a Health Care and/or Dependent Care FSA. You then use your
funds to pay for eligible health care or dependent care expenses.

Account Type Eligible Expenses Annual Contribution Benefit
Limits
Health Care FSA Most medical/Rx, dental Maximum Saves on eligible expenses;
and vision care expenses contribution is reduces your taxable
that are not covered by $2,850 per year income; can carryover up

your health plan (such as to $570 unused funds
copayments, coinsurance,
deductibles, eyeglasses)

Dependent Care Dependent care expenses Maximum Reduces your taxable
FSA (such as day care, after contribution is income; full use-it-or-lose-
school programs or elder $5,000 per year it rule (no carryover)

care programs) ($2,500 if married &
filing separate tax)

Limited Health Care Most dental and vision Maximum Saves on eligible expenses;
FSA care expenses only such as contribution is reduces your taxable
(for HDHP enrollees copayments, coinsurance, $2,850 per year income; can carryover up
only) deductibles, eyeglasses) to $570 unused funds

Account Type With FSA Without FSA FSAs Help You Save On Taxes
Your taxable income $50,000 $50,000
Here is an example of how much you can save
Pretax contributions to Health Care $2,000 $0
and Dependent Care FSA when you use the FSAs to pay for your
predictable health care and dependent care
Federal and Social Security taxes* $11,701 $12,355
expenses.
After-tax dollars spent on eligible $0 $2,000 Important Information about
expenses FSAs
Spendable income after $36,299 $35,645 Your FSA elections are calendar
expenses and taxes
year based. Please plan your
Tax savings with the Health Care $654 N/A
and Dependent Care FSA contributions carefully. Note
that FSA elections do not
*This is an example only and may not reflect your actual experience. It assumes a 25% automatically continue from
federal income tax rate marginal rate and a 7.7% FICA marginal rate. State and local taxes year to year; you must actively
vary, and are not included in this example. However, you will save on any state and local
taxes as well. enroll each year. 7

Your Benefit Guide 2020