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What
is a Flexible Spending Account Plan (or FSA)?
An employee benefit program that allows you to
set aside money, on a pre-tax basis, to pay for certain out-of-pocket health
care and dependent care expenses. Because the money goes into your
account(s) before federal income or Social Security taxes are withheld, you
pay less in taxes, and have more disposable income. Your money is also
exempt from state income taxes in most states.
Do I
have to enroll each plan year?
Yes, you must make an election prior to the
beginning of each plan year. Your employer will provide instructions on
this procedure. The amount you elect will be automatically deducted from
your paychecks during the plan year and credited to your FSA account(s).
Why should I participate in a Health Care Flexible Spending Account when I
already have health care coverage?
Most health care plans have some co-payments
and/or deductibles in addition to non-covered services. You will be able to
use your flexible spending account for these types of expenses.
Can
I submit over-the-counter drugs for reimbursement?
You can submit over-the-counter drugs that are
medically necessary such as allergy medications, aspirin, antacids, and cold
medicines. Amounts paid for items that are merely beneficial to general
health are not eligible for reimbursement.
What
if I currently take the dependent care credit on my annual tax return?
You cannot use both the dependent care FSA
contributions and the income tax credit for the same expenses. The amount
you deposit into your Dependent Care Account reduces the amount, dollar for
dollar, that you can claim as a credit on your tax return.
Deciding whether to participate in the Dependent Care
Account depends on your income, income of your spouse, filing status, number
of dependents and annual dependent care expenses. Please consult a tax
professional for advice.
Can I change my
contributions during the year?
Only if you have a qualified status change such
as marriage, divorce, birth or adoption of a child, death of a dependent,
or a change in your or your spouse’s employment status.
Can I participate in a flexible spending account if I am not covered under
my company’s health care plan?
Yes, you can still participate in the flexible
spending account.
What if I don’t use all of the money I set aside in my account(s)?
Any contributions not used during the plan year
cannot be rolled over or refunded to you (sometimes referred to as the
use-it-or-lose-it rule). Most plans have a year-end grace period determined
by the employer to allow for time to submit all claims.
Do I have to wait for money to be deposited into my account in order to
make a claim for reimbursement?
Health Care Account – your election
amount is available to you as of the beginning of the plan year. This means
that you may receive reimbursement for eligible expenses in excess of your
payroll contributions to date.
Dependent Care Account – you are reimbursed
only up to the amount of your payroll contributions to date.
How do I know
how much is available in my account(s)?
Each time you receive a reimbursement, a
statement attached to your check will show your annual election amount as
well as claims submitted to date. You may also check your account online at
www.pennwestern.com.
What is the maximum amount that I can contribute to my Flexible Spending
Account(s)?
The
maximum contribution for the Health Care Reimbursement Account is
determined by your employer.
The maximum contribution
for the Dependent Care Reimbursement Account is determined by the
following IRS rules.
- If you are married, both you
and your spouse are employed and you file a joint income tax return, or if
you are a single parent, the maximum you can contribute is the least of
your earned income, your spouse’s earned income, or $5,000.
- If you are married and you and
your spouse file separate income tax returns, the maximum is $2,500.
If a spouse also
participates in a Dependent Care Assistance Account, the maximum is $5,000
combined for both accounts.
In the case of a spouse who
is a fulltime student at an educational institution or is physically or
mentally incapable of caring for himself, such spouse shall be deemed to
have earned income of not less than $250 per month if the Participant has
one dependent and $500 per month if the Participant has two or more
dependents.
How do I
obtain reimbursement for eligible expenses?
You
must complete a request for reimbursement form available at
www.pennwestern.com and submit it to Penn Western
Benefits along with copies of bills, receipts, explanation of benefits from
your health care plan, etc. Documentation must include date of service,
type of service, and amount of charges. Copies of cancelled checks, credit
card receipts, or balance forward statements are not adequate proof of
claim. You may mail, fax, or e-mail your request to
flex@pennwestern.com. You
may also enter your claim online at
www.pennwestern.com. You may
use your debit card if your employer’s plan offers this option.
You do not have to pay for
services before being reimbursed, but the expense must have been incurred
during the plan year period for which your election was made.
If I elect too much for my medical FSA, can I transfer excess to my
dependent care FSA?
No, you can use monies only
for the purpose for which your election was made. Monies cannot be
transferred between accounts.
Who should I contact if I
have questions?
You
can speak with your employer’s human resource representative, or contact
Penn Western Benefits at (336) 665-9400; fax (336) 664-1300; or visit our
web site at
www.pennwestern.com. |
