How FSAs Work

A Flexible Spending Account (FSA) makes it easy for employees to save money on healthcare and dependent care expenses.

During open enrollment, employees choose the amounts they would like to put into their healthcare and dependent care accounts. The amount chosen to put into an account is called the annual election amount.

The annual election amount is divided evenly by the number of paychecks that an employee has for the year, and that amount is deducted from each paycheck. The annual election amount can’t change unless the employee has a qualifying event. The employee should notify their employer of a qualifying event as soon as possible.

Using the FSA Plan

Employees have numerous options to use their benefit and submit claims. Account funds can be accessed through the following activities:

  • Chard Snyder Benefits Card: Over 93% of benefits card transactions are auto-substantiated
  • Online Portal & Mobile App: Check balances, file claims and provide substantiation online
  • Claims: Submit a claim online by logging into your account on the participant portal or on the Chard Snyder mobile app for quickest processing and reimbursement. Paper claims can be submitted by fax or mail but expect longer processing times for these methods. Click here to access a paper claim form

Employees pay for expenses using their Chard Snyder Benefits Card, if included in their plan, to pay directly from their account or they pay and then send in a claim for reimbursement. Expenses that occur before the beginning of the FSA plan year are not eligible.

We make it easy for participants to get in touch with Chard Snyder. With a variety of access options, employees have answers at their fingertips 24/7.

Current Contribution Limits

The IRS sets the amounts that employees can contribute to an FSA each year. The IRS set the following contribution limits for 2024:

  • Health Flexible Spending Account: $3,200
  • Flexible Spending Account Carryover Maximum: $640 (if applicable)
  • Dependent Care Account: $5,000
  • Adoption Assistance: $16,810

Change Savings Amounts

Employees tell their employer when they want to change the tax-free amount set aside each paycheck. As long as they do not go over the federal-set annual limits, employees can save as much as they want.

Health and Limited-Purpose FSAs

Health and Limited-Purpose FSAs are for eligible expenses incurred by the employee, their spouse or eligible dependents.

Employees may use their full annual election amount anytime during the plan year. Any money remaining in an employees’ account at the end of the plan year may be lost if their plan doesn’t offer a grace period or carry-over feature. Employees should check the plan rules, located in the participant portal, enrollment materials or contact us to make sure they understand what is included in their plan and the deadlines.

When sending in claims or verification for a purchase made with the benefits card, supporting documents can be a receipt, a bill, an explanation of benefits summary and/or any documents that have the provider name, date of service, the type of service and the amount that you are responsible for.

There is no income tax reporting required when participating in a health or limited-purpose FSA. Expenses paid for with an FSA cannot be itemized and resubmitted through an income tax return.

Dependent Care FSAs

A dependent care FSA is used for expenses that are incurred while an employee and their spouse are at work, looking for work or attending classes as a full-time student.

Employees may use their Chard Snyder Benefits Card, if included in their plan, or be reimbursed for any amount up to the total amount they have contributed through payroll deductions, but not more than their current account balance. Money remaining in an employee’s account at the end of the plan year may be lost unless the plan offers a grace period. Employees should check their plan rules, located in the participant portal, their enrollment materials or contact us to make sure they understand what is included in their plan and the deadlines.

When sending in claims, supporting documents can be a signed claim form from the daycare provider with the dates of service, the dependent's name and the amount. Employees give information about their daycare provider (name, address and tax ID number, or social security number if an individual) on Form 2441 or Schedule 2 of their income tax return.

Employees cannot take both the Dependent Care FSA deduction and an income tax return deduction for the same expense. It may be better for some employees to use the federal child care tax credit depending on their income level, their spouse’s income level and their number of dependents. Employees should contact their tax advisor to discuss how they might use this benefit with the child care tax credit.

Why Do I Need to Save My Receipts?

Chard Snyder is obligated to review FSA transactions to make sure they are eligible according to the IRS guidelines. To confirm that you made an eligible purchase with your FSA funds or received FSA-eligible services, you may be asked for copies of itemized receipts, statements, or an Explanation of Benefits (EOB) summary from your doctor’s or dentist’s office, hospitals, and stores that do not automatically verify eligible expenses. If you receive a request for documentation, take a picture of your paperwork with your mobile device and submit it through the Chard Snyder mobile app or upload it to the online participant portal. You can also send fax or mail us a paper copy but expect longer processing times for these methods.