General
What is a Flexible Spending Account?
Will I have to pay taxes on the money I contribute to health and/or dependent care FSAs?
How much will I really save in taxes by contributing to an FSA?​
How much should I contribute?
If I have my out-of-pocket expenses reimbursed from a health care FSA, can I also use those expenses to take an itemized deduction on my federal tax return?
What are the risks of participating in a health care or dependent care FSA?
What if I don't incur enough expenses to use all the money that I deposit into my FSA?
What does it mean to incur expenses?
Will participating in an FSA affect the amount of my Social Security benefit?
Can I take my FSA with me if I change jobs?
If I underestimate my dependent care FSA contributions, can I use money from my health care FSA to make up the difference?
Can I change my election or stop contributing money to my FSA at any time during the plan year?
Do the funds I put into my FSA earn interest?
Is there a way to get my account information at any time?
How do I document FSA claims when a receipt is required?
What is an IRS Form 1099?
Can I change the amount I put into my spending account later in the year?
What is my alternate ID?
Health Care FSA
What is an eligible expense under the traditional health care FSA?
May I use my health care FSA to get reimbursed for expenses my spouse or dependent children incur, even if they are not covered under my medical plan?
Is mileage in conjunction with a medical visit or appointment a covered FSA expense?
Are orthodontia services, such as braces, eligible for FSA reimbursement?
Can I enroll in a Health Care FSA is my spouse is enrolled in an HSA?
When my dependent turns 26, when does coverage end under the health care FSA?
When I use my flexible spending card, will my copay automatically validate?
Dependent Care FSA
If I have someone come into my home to take care of my children instead of using a day care facility, do these expenses qualify for a dependent care FSA?
How much can I contribute to a dependent care FSA?

I am a divorced parent. May I establish a dependent care FSA for child care expenses even if my ex-spouse has already done so?
Can I use the dependent care FSA for elder care? What if my elderly parent remains in his/her own home or a nursing home but is still my dependent?
Can I get reimbursed from my dependent care FSA as soon as I pay my child care bill?
For dependent care expenses, would I save more by taking a credit on my income tax instead of contributing to an FSA?
FSA claim submission and reimbursement
How do I submit my FSA expenses?
Is there a minimum claim amount I can file?

What happens if I submit a claim for an amount greater than my health or dependent care FSA balance?

How quickly will my claims be processed?
Can I request reimbursement from my FSA for services I receive before the plan year begins if I am not billed until after the plan year starts?

​General
1. What is a Flexible Spending Account?
An FSA is a special account that lets you set aside money for eligible expenses. The money you put into your FSA is taken out of your paycheck before-tax. That means you'll enjoy a tax savings. You can use the account throughout the year to get reimbursed for eligible health care and dependent care expenses.

2. Will I have to pay taxes on the money I contribute to health and/or dependent care FSAs?
No. Money you put into an FSA is taken out of your salary before federal income taxes, Social Security and Medicare taxes and most state and local taxes are applied.

3. How much will I really save in taxes by contributing to an FSA?
Generally, contributions you make to your FSA are not subject to federal or social security taxes. In most instances, there are no state taxes taken out either. The amount you may save depends upon:
· The amount you put into your FSA
· The tax percentage you would normally pay on that money (tax bracket)
If you elect $2,000 in an FSA, the money is taken out of your check before taxes. That reduces your taxable income by $2,000. If for example, you pay 30 percent in federal, social security, and state taxes you would have a tax savings of 30 percent of the $2,000.
In other words, your estimated savings would be $600 on the $2,000 you directed to your FSA.
This example should not be taken as tax advice. See a tax advisor to seek the best advice for your situation.

4. How much should I contribute?
How much you contribute depends on your individual situation.

It's good to plan ahead. Consider the medical, vision, or pharmacy costs not covered by your health plan. Need dental work? How about contact lenses? Buy Band Aids, contact lense solution or sunscreen throughout the year? Your FSA can help cover those over-the-counter items.

If you have child care or elder care expenses you could open a dependent care account.
The IRS limits the amount you can put into a dependent care FSA, up to:
· $5,000 per year, if you are married and filing a joint return, or if you are a single parent
· $2,500 per year, if you are married and filing separately

5. If I have my out-of-pocket expenses reimbursed from a health care FSA, can I also use those expenses to take an itemized deduction on my federal tax return?
No. You cannot claim an expense reimbursed by your FSA as an itemized deduction on your federal income tax return. You can only deduct IRS-eligible health care expenses your FSA did not reimburse.
Look at your situation to decide whether taking a tax deduction is better for you than using a health care FSA. Keep in mind that only medical and dental expenses that exceed 7.5 percent of your adjusted gross income can be deducted on your federal income tax return. Many people do not have enough medical expenses to qualify for this deduction.


6. What are the risks of participating in a health care or dependent care FSA?
FSA dollars are "use-it-or-lose-it" funds. However, you’ll be able to carryover up to $500 of your unused Health Care FSA balance remaining at the end of the current plan year and the funds can be used during the following calendar year. Any unused health care FSA funds over $500 at the end of the year will be forfeited.

Dependent Care FSA account balances cannot be carried over from year to year. If you have any unused funds at the end of the plan year and do not submit for reimbursement by the end of the run-out period, those funds will be forfeited.

7. What if I don't incur enough expenses to use all the money that I deposit into my FSA?
If you have any unused funds at the end of the plan year, you’ll be able to carryover up to $500 of your unused Health Care FSA balance. Dependent care must be used by the end of the plan year or those funds will be forfeited.

8. What does it mean to incur expenses?
The IRS considers expenses to be "incurred" at the time you receive medical care or dependent care--not when you are formally billed or actually pay for services. Only eligible expenses you incur within the plan year, are eligible for reimbursement. The exception to this rule is orthodontia – reimbursement is allowed for pre-paid expenses, up to the elected amount, regardless of the date of service. The payment must have been made during the benefit period.

9. Will participating in an FSA affect the amount of my Social Security benefit?
When you have an FSA, you do not pay federal taxes, including Social Security tax, on the money you put into it. Social Security benefits are based on your earnings. Because salary reductions will reduce your earnings, your Social Security benefit may be slightly less when you retire or if you become disabled. The impact of your benefit level will depend on a number of factors, including
· The length of time between now and when you qualify for Social Security, and
· Whether your taxable income exceeds the Social Security maximum wage level

Call the Social Security Administration at 1-800-772-1213 for more information.

10. Can I take my FSA with me if I change jobs?

Under the federal act known as COBRA, in certian situations you have the option to continue participating in the health care FSA. If you choose to continue a health care FSA under COBRA, your contributions must be paid with after-tax dollars. You cannot continue in a dependent care FSA under COBRA.

11. If I underestimate my dependent care FSA contributions, can I use money from my health care FSA to make up the difference?

No. You cannot transfer money between accounts.

12. Can I change my election or stop contributing money to my FSA at any time during the plan year?

Federal regulations state that once you have enrolled in an FSA, you cannot change your election amount unless you have a qualifying life event.
Here are examples of qualifying life events that allow FSA election changes during the year:

· Marriage
· Divorce
· Birth or adoption of a child
· Death of a spouse or child
· Termination of your spouse's employment
· Commencement of your spouse's employment

13. Do the funds I put into my FSA earn interest?

No. FSAs do not earn interest.

14. Is there a way to get my account information at any time?

Yes. Go to https://myspendingaccount.wageworks.com and log on to your account or download the My Benefits Center app on your smartphone.

15. How do I document FSA claims when a receipt is required?

Navigate and logon to https://myspendingaccount.wageworks.com/
Select "advanced search" from the left side navigation, then click "Claims needing my attention". Select the claim and upload documents.
To validate a card swipe - Click "Card Swipe Validation" from the left side navigation, select the claim you need to validate, and click "upload documents".

You will also need one of the following:
Explanation of Benefits (EOB) - An EOB is sent to you by your health plan. It shows your out-of- pocket expense and the amount your health plan has paid.
Itemized bill - A receipt from your health care provider showing the date of service, amount and nature of the expense. The receipt must include the health plan's payment. We cannot accept your receipts until the health plan has paid its portion.
Future service dates cannot be submitted. IRS guidelines require services to take place before you can be reimbursed. A reimbursement request for a service that will occur in a subsequent plan year will be returned to you for resubmission in that plan year. If documentation or repayment is not received by the end of the year in which the transaction occurred, you will generally be issued an IRS Form 1099, reporting this amount as income to you.

Mail or fax your paperwork to:
WageWorks Spending Accounts
PO Box 34700
Louisville, KY 40232

Fax: 1-866-643-2219

16. What is an IRS Form 1099?
An IRS form 1099 is used by taxpayers to report financial information to the IRS. Money paid from an FSA for expenses that cannot be proven as FSA-eligible, must be returned to the FSA. If documentation or repayment to your FSA is not received by the end of the year the transaction took place, you may receive an IRS Form 1099, reporting this amount as taxable income to you.

17. Can I change the amount I put into my spending account later in the year?
The IRS requires that your spending account elections stay in effect throughout the full plan year. Once your yearly election is made, you cannot change it unless you have a qualifying life event.
Here are examples of qualifying life events that allow FSA election changes during the year:

· Marriage
· Divorce
· Birth or adoption of a child
· Death of a spouse or child
· Termination of your spouse's employment
· Commencement of your spouse's employment
18. What is my alternate ID?
Alternate ID is your State System employee personnel number. Alternate ID can be used in place of your social security number.

Health Care FSA
1. What is an eligible expense under the health care FSA?

Examples of eligible health care expenses include:
Deductibles, copays and coinsurance
Eye exams, eyeglasses and contact lenses
LASIK surgery for vision correction
Hearing exams and hearing aids
Lab fees
Chiropractic treatment
Dental and orthodontic care

Prescription drugs and eligible over-the-counter health care items may also be included.Some over-the-counter health care items may require a prescription to be eligible under the plan

Under IRS rules, health care FSAs are only allowed to reimburse "medical expenses," as defined in section 213(d) of the Internal Revenue Code. Please note, however, that some medical expenses, such as medical insurance, long-term care premiums and long-term care expenses are not reimbursable under a health care FSA.

It's good to consult a tax advisor. IRS Publication 969 is also helpful. It offers guidance on FSA-reimbursable health care costs.

2. May I use my health care FSA to get reimbursed for expenses my spouse or dependent children incur, even if they are not covered under my medical plan?

Yes, as long as the expenses are eligible under your health care FSA.

3. Is mileage in conjunction with a medical visit or appointment a covered FSA expense?

Yes. Mileage and parking for medical visits are covered FSA expenses. The mileage rate is 23 cents per mile in 2015. You must complete and submit a paper claim form. Enter the total mileage charge (traveled round trip multiplied by .23) as a separate expense on the form. The dates of travel must match the corresponding dates of service. Be sure to check this rate annually. It is subject to change by IRS regulations.

4. Are orthodontia services, such as braces, eligible for FSA reimbursement?

Orthodontia reimbursement is allowed for pre-paid expenses, up to the elected amount, regardless of the date of service. The payment must have been made during the benefit period.
Note: When submitting orthodontia information, provide as much information as possible including:
Transaction Date
Description of Services
Name of Patient
Payment Amount
Location of Service
5. Can I enroll in a Health Care FSA is my spouse is enrolled in an HSA?

A health savings account (HSA) is available to an eligible individual who has high deductible health coverage as long as the individual has no other impermissible health coverage. A general purpose FSA is impermissible and renders an individual ineligible to make contributions to an HSA even when it’s their spouse enrolled in a general purpose FSA.

6. When my dependent turns 26, when does coverage end under the health care FSA?


Eligible expenses may be reimbursed under health care FSA until the end of the month that the dependent turns age 26. FSA eligible expenses can continue to be incurred as long as date of service is prior to the end of the month in which the dependent turns 26.

7. When I use my flexible spending card, will my copay automatically validate?


If you are enrolled in a State System medical plan, your copays in most cases will automatically validate. If you are enrolled in the PEBTF, Annuitant Health Care Plan (AHCP), or any other outside medical plan, your copays will NOT automatically validate and you will need to provide validation to the vendor.



Dependent Care

1. If I have someone come into my home to take care of my children instead of using a day care facility, do these expenses qualify for a dependent care FSA?

Yes. If the services are necessary in order for you (or, if you are married, you and your spouse) to work, you can include payments made to a babysitter or companion in or outside your home. Expenses will also qualify if you work and your spouse is a full-time student or is mentally or physically incapable of self-care. However, you cannot be reimbursed for payments made to:
Your spouse
A parent of your qualifying child
Your child under age 19, even if that child is not your dependent
Any person you claim as a dependent on your tax return

2. How much can I contribute to a dependent care FSA?

The maximum contribution depends on your tax filing status.
· If you are married and filing separately, your maximum annual deposit is $2,500.
· If you are single and head of household, your maximum annual deposit is $5,000.
· If you are married and filing jointly, your maximum annual deposit is $5,000.
· If either you or your spouse earn less than $5,000 a year, your maximum annual deposit is equal to the lower of the two incomes.
· If your spouse is a full-time student or incapable of self-care, your maximum annual deposit is $3,000 a year for one dependent and $5,000 a year for two or more dependents.

3. I am a divorced parent. May I establish a dependent care FSA for child care expenses?

Yes, if you are the custodial parent. This is true even if the non-custodial parent claims the dependency exemption for that child. In general, the custodial parent is the parent with whom the child lives for more than 50% of the year. The non-custodial parent may not participate in a dependent care FSA because the IRS takes the position that dependent care expenses are not necessary for the non-custodial parent to be gainfully employed.

4. Can I use the dependent care FSA for elder care? What if my elderly parent remains in his/her own home or a nursing home but is still my dependent?

You can use the dependent care FSA for elder care expenses so that you (or if you are married, you and your spouse) can work. To claim the expenses:
Your parent must qualify as your dependent under the tax rules. Please see IRS Publication 503 at www.irs.gov for specifics.
Your parent must be physically or mentally incapable of self-care.
Your parent must reside in your home for at least half of the year.
Your parent must usually spend at least eight hours a day in your home.

5. Can I get reimbursed from my dependent care FSA as soon as I pay my child care bill?

Under IRS guidelines, you can only be reimbursed for dependent care that has already taken place. Also, you can only be reimbursed for the amount that you have already contributed to your dependent care FSA. Unlike the health care FSA, the full amount of your dependent care election is not available January 1.

6. For dependent care expenses, would I save more by taking a credit on my income tax instead of contributing to an FSA?

You can use both a dependent care FSA and claim the federal Child and Dependent Care Credit. You just can't claim the same expenses for both. If you plan to use both, the IRS requires that you subtract the amount you have directed into a spending account from the expenses you use to calculate the tax credit.

The IRS allows you to claim the tax credit for work-related dependent care expenses when you file your federal income tax return. The tax credit amount is calculated by applying a percentage to your total work-related dependent care expenses. The expenses to which this percentage is applied may not exceed $3,000 for one qualifying person or $6,000 for two or more.

If you receive any reimbursements from a dependent care FSA, the IRS requires that you complete Form 2441 and attach it to your federal income tax return. Form 2441 requires the following dependent care provider information:
Name
Address
Social Security Number or tax identification number
Amount paid
If you do not provide this information to the IRS you may lose the tax benefits of the FSA. Visit www.irs.gov for forms, instructions, publications and more information.

FSA Claim Submission and Reimbursement

1. How do I submit my FSA expenses?

Log on to https://myspendingaccount.wageworks.com view our FSA guide for instructions.

If you have a medical, dental or prescription drug plan:
Submit your Explanation of Benefits (EOB) with your completed claim form. An EOB is typically e-mailed or mailed to you after a claim is processed. If your plan covered at least part of your expense, your EOB is the only documentation needed.

If you do not have a medical, dental or prescription drug plan:
Submit the itemized receipt or statement from your doctor, dentist, pharmacist or other health care professional. The receipt or statement must clearly state your responsibility for the expenses. It must also include:
Patient's name
Name and address of health care provider
Service date(s)
Type of service
Amount charged
For resubmissions - label the cover sheet “resubmission” and include the Transaction number (found on your account summary); date of birth, Personnel ID number, and existing claim #.

2. What happens if I submit a claim for an amount greater than my health or dependent care FSA balance?

If you submit a claim for your health care FSA that exceeds the balance, you will be reimbursed up to the full amount of your annual election. That will happen regardless of the amount of money that has been deposited into your account. Contributions will continue throughout the year, and claims will continue to be paid until your total fund amount is gone.

Dependent care claims are paid a little differently. If you submit a claim and your balance is less than the amount of the claim, you will only be reimbursed for the amount of money available in your account. The remainder will be reimbursed once money is deposited (via payroll deductions) into your dependent care FSA.

3. Can I request reimbursement from my FSA for services I receive before the plan year begins if I am not billed until after the plan year starts?

No. According to IRS guidelines, a qualified expense is incurred at the time the service is given, not when you are billed, charged or actually pay for the service.