Page 12 - 2017 Employee Benefit Highlights

Additional tax savings
Flexible Spending Accounts

Flexible Spending Accounts (FSA) | discoverybenefits.com | irs.gov

When you participate in an FSA plan via payroll deduction, you reduce your federal, FICA, You must re-enroll in the FSA
Social Security, Medicare (and in some cases, state) taxes and increase your take-home plan each year to continue
pay. The money that is deposited into your Flexible Spending Account comes straight out participating!
of your gross pay, therefore reducing taxes. For a full list of eligible expenses for
reimbursement, log on to irs.gov.

Our Health Care FSA allows you to set aside up to $2,600 pre-tax dollars for out-of-
pocket eligible health care expenses such as: Important things to keep in mind:
• Major dental work or orthodontics • Your contributions are subject
• Eyeglasses/contact lenses to the “use-it or lose-it” rule.
• Laser eye surgery Any unused contributions are
• Medical deductible, copays, coinsurance forfeited to the plan at the end
• Prescription drugs of the plan year. There is a 2½
You will receive a debit Benefits Card for yourself and any dependents. This card debits month extension in which to
funds directly from your Health Care FSA account. Keep all receipts for items you purchase. incur qualified Health Care FSA,
Dependent Care FSA and Limited

Our Dependent Care FSA allows you to set aside up to $5,000 per year for out-of-pocket Purpose FSA expenses up until
eligible expenses. If you are married and you file separate tax returns, certain limits apply. March 15, 2017. (You will have until
Eligible expenses include: June 15, 2017 to file claims for the
year.)
• Care at a qualified day care center
• Nursery school expenses • All 2016 FSA claims, including
• Before and after school child care claims applied to the grace period
January 1, 2017 through March 15,

If you enroll in the HDHP HSA medical plan, you may also enroll in a Limited Purpose 2017, must be submitted by
Flexible Spending Account (FSA). A Limited Purpose FSA works like the Health Care FSA, June 15, 2017 to Discovery Benefits
but it reimburses qualifying dental and vision expenses only. The IRS limit is $2,600. for reimbursement.
• You must contribute to your
How much money should I set aside in my flexible spending account? account throughout the calendar
Use an interactive calculator to help you plan the amount to set aside with each paycheck year unless you have an eligible
and it will show you how much money you’ll save by taking advantage of your FSA. Go to change in life status.
https://www.discoverybenefits.com/employees/FSA-calculator.
• You cannot transfer funds from one
Example of how an FSA works: type of account into the other.
Without FSA With FSA • You must re-enroll each year.
Gross Pay $25,000 $25,000
Health Care FSA Contributions $ 0 – $ 2,000 • You cannot participate in a Health
Dep. Care FSA Contributions $ 0 – $ 5,000 Care FSA if you have an HSA
Salary You’re Taxed On $25,000 $ 18,000 (Health Spending Account). You
Less Federal Income Taxes* – $ 3,750 – $ 2,700 may participate in the Dependent
Less Social Security* – $ 1,913 – $ 1,377 *Example based on Care FSA and Limited Purpose FSA.
Less After-Tax Healthcare Expenses – $ 2,000 $ 0 effective federal
Less After-Tax Dep. Care Expenses – $ 5,000 $ 0 income rate of 15%
and Social Security
Your Take-Home Pay $ 12,337 $ 13,923 taxes of 7.65%.

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