With a Health Care FSA, you set aside pretax money via payroll deduction to help pay for eligible healthcare expenses. Use your FSA to save 25% or more on the things you buy every day!
WHAT IS A HEALTH CARE FSA?
A Health Care FSA is a pretax savings account that allows you to pay for essential medical, dental and vision care expenses that are not covered — or only partially covered — by your medical, dental and vision insurance plans. By contributing a portion of your payroll dollars to your account on a pretax basis, you can save from 25 to 40 percent on the cost of eligible expenses.
What is an IRS-Qualified Medical Expense?
PAYING FOR MEDICAL EXPENSES
When you enroll in a Health Care FSA with your employer, you decide how much to contribute to the account for the entire Plan Year. The money is then deducted from your paycheck each pay period throughout the year before FICA, federal and applicable state income tax deductions.
The Flex Made Easy debit card makes it easy to pay for qualified expenses. Participants are provided with a Health Care FSA debit card shortly after opening their account . You may also reimburse yourself directly from your FSA account as you incur eligible expenses. Withdrawals from the account are not taxed as long as they are used for qualified expenses.
2022 HEALTH CARE FSA QUICK TIPS
- You can enroll in a Health Care FSA if you are enrolled in a traditional major medical plan (e.g., EPO, PPO, HMO). You cannot enroll in a Health Care FSA if you or your spouse are enrolled in a qualified High Deductible Health Plan (HDHP) with a Health Savings Account (HSA)
- You do not need to be enrolled in your employer’s plan. You can be covered under a spouse’s or parent’s plan and still enroll in a Health Care FSA as long as your spouse or parent does not have a qualified HDHP with an HSA. Expenses for any of your tax dependents are eligible for reimbursement, even if they are not covered under your employer’s health insurance plan
- For 2022, the maximum annual election is $2,850. The minimum annual election is $100
- Your election is typically fixed for the entire Plan Year unless you have a qualifying life event
- The Health Care FSA is a non-interest-bearing account. You cannot invest the funds in the account
- There is a 90-day claims runout period after the end of your Plan Year for submitting claims for eligible heath care expenses incurred in the prior Plan Year. Your Plan may have a Rollover Option ($570 is the maximum rollver for plan years ending in 2022) or a 2 ½ month Grace Period
HEALTH CARE FSA IN ACTION: MEET MEGAN!
Megan elects medical coverage for her two children and husband, Joe, who has a health condition that requires regular doctor’s office visits and prescription medication. Her youngest child will also need braces during the year.
Megan decides to contribute $200 per month to her Health Care FSA. The monthly contributions lower her taxable income resulting in a tax savings of $720 for the year and $2,400 available to her for out-of-pocket medical and vision expenses.
Gross Monthly Salary
Monthly FSA Contribution
Taxable Monthly Income
Income Tax Bracket
Tax Savings on $2,400 Annual Contribution