13 / 37
13
Bonner Springs/Edwardsville USD 204
Contributions and investment earnings are tax-free, as are disbursements from the account to pay for qualified
expenses. Funds withdrawn for non-qualified expenses will be assessed a 20% penalty in addition to normal
taxation. The penalty is waived in the event of death, disability, or attainment of Medicare eligible age
Flexible Spending Accounts (FSA)
Types of Accounts
Part 1) Pre-tax Premiums
Your premium contributions for medical, dental, vision, and some other insurance coverage are eligible to be run
through the Section 125 plan on a pre-tax basis – allowing additional tax savings and increasing your take-home
pay.
Part 2) Healthcare Flexible Spending Account (FSA)
The district provides you the opportunity to pay for out-of-pocket medical, dental, vision and dependent care
expenses with pre-tax dollars through Flexible Spending Accounts. Contributions to your FSA come out of your
paycheck before any taxes are taken out. This means that you don’t pay federal income tax, Social Security taxes,
or state and local income taxes on the portion of your paycheck you contribute to your FSA. You should contribute
the amount of money you expect to pay out of pocket for eligible expenses for the plan period. If you do not use
the money you contributed it will not be refunded to you or carried forward to a future plan year. This is the use-it-
or-lose-it rule. The maximum that you can contribute to the FSA is $2,550. All the funds are available day one of
the plan year.
Part 3) Limited Healthcare Flexible Spending Account (LFSA)
This account offers you the same pre-tax savings opportunity as the FSA mentioned in Part 2, however it is limited
to dental and vision expenses only. You cannot use the funds from this account to pay for medical expenses. This
account is for individuals participating in the QHDHP with a Health Savings Account (HSA). It allows someone to
use all the funds in their HSA to cover their medical deductible and still have additional funds through the LFSA to
pay for dental and vision expenses. You should contribute the amount of money you expect to pay out of pocket
for eligible expenses for the plan period. If you do not use the money you contributed it will not be refunded to you
or carried forward to a future plan year. This is the use-it-or-lose-it rule. The maximum that you can contribute to
the LFSA is $2,550. All the funds are available day one of the plan year.
Part 4) Dependent Daycare Account
A dependent care FSA is used to reimburse expenses related to care of eligible dependents while you and your
spouse work. The contributions to your dependent daycare account come out of your paycheck before any taxes
are taken out. You should contribute the amount of money you expect to pay out of pocket for eligible expenses for
the plan period. If you do not use the money you contributed it will not be refunded to you or carried forward to a
future plan year. This is the use-it-or-lose-it rule.
The maximum that you can contribute to the Dependent Care Flexible Spending Account is $5,000 if you are a
single employee or married filing jointly, or $2,500 if you are married and filing separately. The funds you
contribute to this account are available within 3-5 days after each payroll deduction.