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Using Healthcare and Dependent Care Flexible Spending Accounts An FSA = An Opportunity to Save.

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Presentation on theme: "Using Healthcare and Dependent Care Flexible Spending Accounts An FSA = An Opportunity to Save."— Presentation transcript:

1 Using Healthcare and Dependent Care Flexible Spending Accounts An FSA = An Opportunity to Save

2 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?

3 ©2009. ADP. Confidential Material. Got one of these?

4 ©2009. ADP. Confidential Material. Want your software at a discount?

5 ©2009. ADP. Confidential Material. How about great savings on hardware?

6 ©2009. ADP. Confidential Material.

7 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. Its like getting a coupon for a discount up to 40%.

8 Determine amount you want deducted from your paycheck Money is put into your account before taxes are taken out How does it work?

9 It saves you money It isnt tied to a certain kind of healthcare plan, like a high deductible plan Its easy to use ©2009. ADP. Confidential Material. Why should I use an FSA?

10 Use the funds in your FSA to pay for eligible expenses FSA funds dont carry over to the next year and you have to re-enroll every year Its easier than you might think to spend all your FSA dollars ©2009. ADP. Confidential Material. How do I get my money back?

11 ©2009. ADP. Confidential Material. Tax Saving Example Or, how can bringing home less of my paycheck help me get more for my money? By using her FSA, Kim brought home an additional $534 for the year! Example of annual savings With FSA Without FSA Kims taxable income $55,000 $55,000 Pre-tax money deposited into her FSA -$1,500 -$0 Kims 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 Kims remaining take-home pay $34,427 $33,893

12 ©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: Save on things you buy every day

13 ©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: A few things cant be reimbursed

14 ©2009. ADP. Confidential Material. Save BIG on Dependent Care FSA Expenses Daycare and after-school care for your children while you work If youre 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

15 ©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

16 ©2009. ADP. Confidential Material. When can I sign up? FSA elections can be made: During your employers 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

17 ©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

18 ©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 employers schedule

19 ©2009. ADP. Confidential Material. Additional Information 24-hour access to account information Claim forms Substantiation forms FAQs hour access to recorded account information Live representatives available 8 a.m. – 8 p.m. Eastern Time (Monday through Friday)

20 Sign up NOW to save on purchases you make every day!


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