Page 21 - SBCEO Benefit Guide 19-20_FINAL

Tax Savings Benefits 21

Flexible Spending Account (FSA) Plan

Spending Account Rules
1) You must designate how much money you wish to contribute annually to each account at the beginning of the plan year
(October 1 or date of hire). Money set aside for one account cannot be moved to another account.
2) You may change your annual contributions within 30 days of experiencing a qualifying “change in family status,” such as
marriage, divorce, addition or loss of a dependent, a change in your spouse’s employment, etc.
3) It is important to carefully review your estimated expenses since any unclaimed funds remaining in each account as of
December 15 of the following plan year will be forfeited. All expenses must be submitted by March 15 of the following plan
year to qualify for reimbursement.

The FSA Debit Card/Direct Deposit
The FSA Debit Card enables you to pay for eligible health care expenses directly from your Healthcare Spending Account.
Your Spending Account is electronically debited whenever you use the card. IRS regulations require that you provide
documentation to verify eligibility of certain expenses but you don’t have to wait for reimbursement. The FSA Debit Card
is accepted by eligible merchants and providers who use the Mastercard or VISA system.
You may also elect to have reimbursements deposited directly into your bank account.

Example: How You Can Save Money With an FSA

Without the With the
Health Care FSA Health Care FSA
Gross Annual Pay $45,000 $45,000
Pre-Tax Health Care FSA Not Elected $1,200

Taxable Gross Income $45,000 $43,800
Payroll Taxes (at 30%) $13,500 $13,140
Health Care Cost $1,200 $0
Net Pay $30,300 $30,660

Annual Net Pay Increase $0 $360

Important Note: Your FSA elections will expire each year on September 30. If you plan to participate in the FSA for the
upcoming plan year, you are required to re-enroll.