11
Flexible Spending Accounts (FSAs) enable you to put aside money for
important expenses and help you reduce your income taxes at the same
time. PR&C offers two types of Flexible Spending Accounts a Health
Care Flexible Spending Account and a Dependent Care Flexible Spending
Account. Our Flexible Spending Accounts are administered by Discovery
Benefits and work like a savings account—each pay period a pre-tax
payroll deduction is deposited into your Health and/or Dependent Care
Spending Account. When you need money to cover an eligible expense,
you make a pre-tax "withdrawal" by using the Discovery Benefits Debit
Card* at the point of services and/or completing a claim form and
providing proper documentation (pharmacy receipts, detailed bills or
explanation of benefits [EOB]).
Note: The FSAs run on a calendar
year basis from January 1st through December 31st. You must re-
elect your FSAs for the following year each November.
How Flexible Spending Accounts Work
1. Each calendar year during the FSA open enrollment period, you decide
how much to set aside for health care and/or dependent care expenses.
2. Your contributions are deducted from your paycheck on a pre-tax basis
in equal installments throughout the calendar year.
3. As you incur health care or dependent care expenses throughout the
year, submit a claim form for reimbursement. Your claim will be processed and you will be reimbursed from your
account. You may also use your FSA debit card to pay for eligible expenses at the point of sale. If you use your FSA
debit card there is no need to fill out a claim form and wait for reimbursement.
Please note that these accounts are separate - you may choose to participate in one, both, or neither. You cannot use
money from the Health Care FSA to cover expenses eligible under the Dependent Care FSA or vice versa.
You must actively re-enroll in the FSAs each year.
You are not automatically re-enrolled.
Flexible Spending Accounts
Plan
Annual Maximum Contribution
Examples of Covered Expenses
Health Care Flexible
Spending Account
$2,500
Copays, deductibles, orthodontia, prescription
medications, etc.*
Dependent Care Flexible
Spending Account
$5,000 ($2,500 if married and filing
separate tax returns)
Day care, nursery school, elder care expenses, etc.
* See IRS Publications 502 and 503 for a complete list of covered expenses.
* Discovery Benefits Debit Card
When you use the Discovery Benefits Debit Card to pay for eligible expenses, the payment is automatically withdrawn from your account.
Certain expenses may need to be substantiated to satisfy IRS guidelines, so be sure to save all your receipts when using the debit card.
Careful Planning Required for FSA's
Use it or Lose it. Remember to calculate your expenses conservatively when making your FSA elections and
deposit only the money you expect to use. IRS regulations require that you forfeit any money left in your
account after the claims submission deadline.
