Flexible Spending Account
Flexible Spending Accounts (FSAs) allow you to set aside money to pay for out-of-pocket expenses on a pre-tax basis. There are two types of accounts:
- Dependent care to a maximum of $5,000 per household and $2,500 for employees who are married and file taxes separately
- Medical to a maximum of $2,500.
ADP is the company that administers our FSAs. They maintain your account(s), pay your claims and issue you a debit card to use when you purchase qualifying services.
Here is how an FSA works
- Based upon your annual election for contributions, money is deducted each pay from your paycheck, before taxes are calculated. This saves you money because you do not pay certain state and federal income tax on the contributions
- You then receive services (such as medical care or day care) or buy medical items, (such as prescriptions, eyeglasses, lenses, durable medical equipment etc.) You can use your FSA for out of pocket medical expenses not covered by your health insurance as well as child and elder care costs (for dependents you declare for income tax purposes) and pay for the services/items with your SHPS debit card. Or you can pay cash for services and submit a claim and receipt to SHPS for reimbusement. You may choose to receive a check or have the money direct deposited to your bank account.
This plan is governed by IRS regulations so rules apply such as:
- You must use the money in the account by March 15 of the following plan year or you will lose it
- The plan covers out-of-pocket medical expenses not covered by your health insurance plans
- Both parents must work for dependent care expenses to qualify
- You must re-enroll for FSA account(s) every plan year during open enrollment
- You can not change the amount of your contribution during the plan year unless you have a life event such as marriage, birth, or a change of job that impacts benefits
For more information consult the ADP website at ADP Flexible Spending or call ADP Customer Service at 800-778-0043.