Flexible Spending Accounts
A Flexible Spending Account (FSA) is a tax-advantaged way for you to pay for medical and/or day care expenses. This added benefit allows you to pay for these expenses using pre-tax dollars which will lower your taxable income resulting in a higher take home pay. Most participants save at least 28 percent, savings vary by employee’s tax bracket.
FSA Maximums for 2012
- Health Care FSA $5,000
- Dependent Care FSA $5,000
Health Care FSA
The Health Care FSA helps pay for eligible medical expenses including:
- Health/Dental/Vision deductibles, coinsurance and co-payments
- Prescriptions
- Vision care including glasses, contact lenses, saline solution & laser eye surgery
- Dental expenses including orthodontia
Dependent Care FSA
The Dependent Care FSA provides tax relief for day care costs for children through age 12 and adult day care. Eligible expenses include day care provided by a licensed facility, in-home dependent care, before/after-school care programs, pre-school and summer day camp.
Re-Enrollment is Required
Re-enrollment is required during the fall 2011 Open Enrollment if you want to continue or enroll in a Flexible Spending Account for Day Care Expenses or for Health Care Expenses for the Plan Year beginning January 1, 2012.
Flex Debit Card
All new FSA participants will receive a Debit Card to pay for eligible expenses. Existing participants can continue to use their current card. Get more details about your flex debit card.
Health Care FSA Grace Period
Baltimore County Government has adopted the FSA Grace Period which allows health care FSA participants to incur services through March 15, 2013. Services incurred during the grace period will automatically be paid from your previous plan year balance. This enhancement does not apply to the Dependent Care FSA. Claims for expenses incurred during the allowed period must be submitted for reimbursement no later than April 30, 2013.
Use It or Lose It Rule
The IRS requires that amounts set aside in the FSA accounts must be used each year only for qualified expenses. Balances that remain in an FSA account at the end of a plan year (after the grace period expires) cannot be returned to individual plan participants. Therefore, it is important that you estimate your expenses carefully. Because of the tax savings, you would have to lose more than those savings to be in a true loss position.
Revised December 27, 2011
