An FSA = An Opportunity to Save
Using Healthcare and Dependent Care Flexible Spending Accounts
Imagine…
There is $300 in the HR office for every
employee to pick up, no strings attached.
How many of you
would pass that up?
Got one of these?
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What is a Flexible Spending Account (FSA)?
•
•
Two types:
• Healthcare
• Dependent Care
You do not pay federal income tax on the funds in your
account. It’s like getting a coupon for a discount up to 40%.
©2009. ADP. Confidential Material.
How does it work?
•
•
Determine amount you want deducted from your paycheck
Money is put into your account before taxes
are taken out
Why should I use an FSA?
•
•
•
It saves you money
It isn’t tied to a certain kind of healthcare plan, like a high
deductible plan
It’s easy to use
©2009. ADP. Confidential Material.
How do I get my money back?
•
•
•
Use the funds in your FSA to pay for eligible expenses
FSA funds don’t carry over to the next year and you have to
re-enroll every year
It’s easier than you might think to spend all your FSA dollars
©2009. ADP. Confidential Material.
Tax Saving Example
Or, how can bringing home less of my paycheck help
me get more for my money?
Example of annual savings
With FSA
Without FSA
Kim’s taxable income
$55,000
$55,000
Pre-tax money deposited
into her FSA
-$1,500
-$0
Kim’s remaining
taxable income
$53,500
$55,000
Minus Federal, Medicare
and Social Security taxes*
-$19,073
-$19,607
Take-home pay spent on
FSA-eligible health care
expenses
-$0
-$1,500
Kim’s remaining
take-home pay
$34,427
$33,893
By using her FSA, Kim brought home an additional $534 for the year!
©2009. ADP. Confidential Material.
Save BIG on Eligible Health Care FSA Expenses
•
•
Examples of eligible expenses:
• Deductibles and co-payments
• Vision expenses (prescription eyeglasses,
contact lenses)
• Dental expenses
• Prescription drugs
• Certain over-the-counter (OTC) drugs and
medicines
For a more comprehensive list, visit:
www.flexdirect.adp.com.
Save on things you buy every day
©2009. ADP. Confidential Material.
Ineligible Health Care FSA Expenses
•
Examples of ineligible expenses:
• Cosmetic surgery
• Teeth bleaching
• Health club memberships
• Insurance premiums
• For a more comprehensive list, visit:
www.flexdirect.adp.com
A few things can’t be reimbursed
©2009. ADP. Confidential Material.
Save BIG on Dependent Care FSA Expenses
•
•
Daycare and after-school care for
your children while you work
• If you’re married, your spouse
must work, be a full-time
student or be disabled
A dependent is defined as:
• A child under age 13 (tax
dependent)
• A spouse or tax dependent who
is mentally or physically
incapable of caring for himself
©2009. ADP. Confidential Material.
Dependent Care FSA Expenses
Eligible
• Licensed nursery schools
(Pre-K and under)
• Day care centers
• Day camps
• Care inside your home
Ineligible
• Educational expenses for
school-age children
• Overnight camps
• Food
• Transportation
• Extracurricular activities
©2009. ADP. Confidential Material.
When can I sign up?
•
FSA elections can be made:
• During your employer’s annual Open Enrollment period
• When you initially meet eligibility requirements
• If you have a qualified status change (based on plan
design), for example, a change in:
• Legal marital status
• Number of dependents
• Employment status
• Dependent who ceases to meet eligibility
©2009. ADP. Confidential Material.
Contributions
Healthcare
• Your employer determines plan maximum and minimum
Dependent Care
• Your employer determines plan maximum (no more than the
IRS limit of $5,000 per family) and minimum
Note: Your annual election goal amount is evenly divided
among your paychecks throughout the year
©2009. ADP. Confidential Material.
Reimbursements
Eligible expenses can be reimbursed:
1. After the service is delivered by
submitting a claim form
2. Reimbursements are:
• Made via check or Direct
Deposit reimbursement
• Processed based on your
employer’s schedule
©2009. ADP. Confidential Material.
Additional Information
• www.flexdirect.adp.com
• 24-hour access to account information
• Claim forms
• Substantiation forms
• FAQs
• 1-800-654-6695
• 24-hour access to recorded account information
• Live representatives available 8 a.m. – 8 p.m. Eastern
Time (Monday through Friday)
©2009. ADP. Confidential Material.
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