How the FSA Works
The Flexible Spending Account makes it easy for employees to save money on healthcare and dependent daycare expenses.
During open enrollment, employees choose the amounts they would like to put into their healthcare and dependent daycare 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.
Employees pay for expenses using their Benny® prepaid 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.
Submitting Claims is Easy
- Send claim form and supporting documents to Chard Snyder through the participant portal, Chard Snyder mobile app, email, fax or mail.
- Claims are reviewed and expenses approved, then payment is issued by direct deposit or check.
- Claims are processed daily and payments are distributed at least once a week.
Healthcare and Limited Healthcare FSAs
The Healthcare and Limited Healthcare 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 Benny, 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 healthcare or limited healthcare FSA. Expenses paid for with an FSA cannot be itemized and resubmitted through an income tax return.
Dependent Daycare FSA
The dependent daycare account 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 Benny® prepaid 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 to 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 Daycare 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.