To help you pay for certain expenses using pretax dollars, you can participate in a Flexible Spending Account (FSA). There are three types of FSAs —the Health Care FSA, the Limited Purpose Health Care FSA, and the Dependent Care FSA.

Note: If you are a participant in an HSA, you are not eligible for the Health Care FSA reimbursement account; instead, you may participate in a Limited Purpose Health Care FSA.

 

Health Care FSA

You may enroll in a Health Care FSA as long as you aren’t enrolled in the CDHP, which offers the Health Savings Account (HSA) instead.

If you enroll, you can use the funds in your Health Care FSA to pay for eligible expenses like deductibles, copays, and coinsurance for you and your eligible dependents. You can contribute from $125 to $2,750 for 2022. Be sure to plan your payroll contributions to coincide with expenses you will incur during the year. You have until March 31, 2023 to submit Health Care FSA claims for expenses incurred between January 1 and December 31, 2022.

You can roll over up to $550 in unused funds to the next plan year. Carryovers for the Health Care FSA are limited to one plan year, so any carryover funds from 2022 will only be available until the end of 2023. You should still calculate your expected expenses carefully, because any funds over $550 that you don’t use during the plan year will be forfeited. The Health Care FSA is designed to help pay for eligible out-of-pocket health care expenses. You will receive a debit card which will allow you to access funds from your Health Care FSA, if you choose to use one. You can use your debit card if the funds are available. Please note: The debit card does not apply to the Dependent Care FSA.

 

Limited Purpose Health Care FSA

If you are enrolled in the Select Plus HSA Compatible CDHP plan, you are eligible for the Limited Purpose Health Care FSA. The Limited Purpose Health Care FSA works the same way as the standard Health Care FSA: pretax contributions, “use it or lose it” elections, and expenses must occur within the plan year.

However, with the Limited Purpose Health Care FSA, you can only submit claims for eligible vision and dental expenses. You can contribute from $125 to $2,750 for 2022. You have until March 31, 2023 to submit Limited Purpose Health Care FSA claims for expenses incurred between January 1 and December 31, 2022. You can roll over up to $550 in unused funds to the next plan year. Carryovers for the Limited Purpose Health Care FSA are limited to one plan year, so any carryover funds from 2022 will only be available until the end of 2023. You should still calculate your expected expenses carefully, because any funds over $550 that you don’t use during the plan year will be forfeited.

 

Dependent Care FSA

The Dependent Care FSA sets aside pre-tax funds to help pay for expenses associated with caring for elder or child dependents. Unlike the Health Care FSA, reimbursement from your Dependent Care FSA is limited to the total amount that is deposited in your account at that time. You can incur expenses to be reimbursed from your 2022 Dependent Care FSA until March 15, 2023. The deadline for submitting a claim for reimbursement of 2022 Dependent Care FSA eligible expenses is May 15, 2023.

Eligible Dependents

An eligible dependent is a person who shares a primary place of residence with you for more than six months each year and is:

  • Your child under age 13 whom you can claim as a dependent on your federal income tax return;
  • Your spouse who is mentally or physically disabled; or
  • Your dependent who is mentally or physically disabled and whom you can claim on your federal income tax return.

In most cases, your domestic partner and children of your domestic partner are not considered eligible dependents for purposes of your Dependent Care FSA.

Account Type Eligible Expenses Annual Contribution Limits
Health Care FSA Most medical, dental and vision care expenses that are not covered by your health plan (such as copayments, coinsurance, deductibles, eyeglasses and doctor-prescribed over-the-counter medications) Maximum contribution is $2,750 for 2022 calendar year.
Limited Purpose Health Care FSA You can submit claims for eligible vision and dental expenses Maximum contribution is $2,750 for 2022 calendar year.
Dependent Care FSA Dependent care expenses (such as day care, after-school programs or elder care programs) so you and your spouse can work or attend school full-time Maximum contribution is $5,000 per year ($2,500 if married and filing separate tax returns)

If you do not spend all the money in your FSA by the deadline, IRS regulations state that it cannot be reimbursed to you as regular pay because it was taken in pretax dollars. As a result, any unused dollars in your FSA(s) after the deadline will be forfeited.

FSAs Help You Save on Your Taxes

Here’s an example of how much you can save when you use the FSAs to pay for your predictable health care and dependent care expenses.

Account Type With FSA Without FSA
Your taxable income $50,000 $50,000
Pretax contribution to Health Care FSA and Dependent Care FSA $2,000 $0
Federal and Social Security taxes $11,701 $12,355
After-tax dollars spent on eligible expenses $0 $2,000
Spendable income after expenses and taxes $36,299 $35,645
Tax savings with the Health Care and Dependent Care FSAs $654 N/A

Compare The Accounts

  HSA Limited Purpose Health Care FSA Health Care FSA Dependent Care FSA
Available with … Select Plus HSA Compatible CDHP Select Plus HSA Compatible CDHP
Select Plus PPO
SignatureValue HMO Plan
(Also available if you waive medical coverage)
Your employment at Belkin
Receive company contribution Yes No No No
Change your contribution amount anytime Yes No No No
Access your entire annual contribution amount as needed No Yes Yes No
Access only funds that have been deposited Yes No No Yes
Use account money for… All eligible health care expenses Only dental and vision expenses All eligible health care expenses Eligible dependent care expenses, including child care for children up to age 13 and care for dependent elders
“Use it or lose it” at year-end No Yes (Carry over up to $570) Yes (Carry over up to $570) Yes
Money is always yours to keep Yes No No No

Health Care FSA or Limited Purpose Health Care FSA Claims Filing Extension

Due to the COVID-19 national emergency the IRS has extended the deadline to submit a claim for reimbursement from your FSA. Beginning on March 1, 2020, (the beginning of the outbreak period), the deadlines to submit your health care and limited purpose health care FSA claims are paused until the earlier of:

  • One year from the date a particular individual or plan was first eligible for relief; or
  • 60 days from the end of the COVID-19 national emergency (i.e., the end of the Outbreak Period).

Health Care FSA runout example. The deadline to submit claims is normally 90 days after the end of the plan year (for example. March 31st).

For the 2020 Plan Year: Due to the on-going outbreak period, you have until March 31, 2022 to submit claims incurred in 2020.

These rules are temporary and subject to change if the outbreak period or national emergency ends.

Questions?

If you have questions, contact PayFlex at (800) 284-4885 or www.payflex.com.