FSA Description

Flexible Spending Accounts (FSAs) are part of an IRS regulated, employer-sponsored benefit plan that allows participants to voluntarily convert part of their compensation into tax-free benefits. Contributions made through FSAs are normally free of federal, state and Social Security taxes.

 

Healthcare Flexible Spending Account (FSA)

The Healthcare Flexible Spending Account allows for certain out-of-pocket healthcare expenses to be paid for on a pre-tax basis. Participant elections are payroll deducted and placed in a special account for reimbursements to be issued as claims are incurred. Participants are able to receive their full election amounts anytime during the plan year. Participants cannot change their individual elections unless they experience a qualifying event (i.e. marital status change, change in number of dependents) as determined by their employer.

There is no income tax reporting required when participating in this account. The payroll deductions are free of federal, state and (in most cases) FICA taxes and do not even appear on a W-2 as reported income.

Reimbursements are received by faxing, emailing or mailing claims and supporting documentation to Chard Snyder. Supporting documentation can be a receipt, a bill, an explanation of benefits summary and/or any documentation that provides the date of service, the type of service and the amount. After the claim has been reviewed and the expense approved, payment is then issued to the participant via direct deposit or a check. Claims are processed daily and payments are issued at least once per week. Claims forms are available in the forms section.

Reimbursements are only issued for eligible expenses incurred by the participant, their spouse or their eligible dependents. Any funds remaining in the account at the end of the plan year and after the corresponding grace period are forfeited.


The employer determines eligibility for this benefit (within discrimination requirements ) and the maximum and minimum contributions allowed.

 

Dependent Daycare Flexible Spending Account (FSA)

The Dependent Daycare Flexible Spending Account allows for certain out-of-pocket daycare expenses to be paid on a pre-tax basis. Participant elections are payroll deducted and placed in a special account for reimbursements to be issued as claims are incurred. Participants may receive reimbursements up to the total amount contributed through payroll deductions, but not more than their current account balance. Participants cannot change their individual elections unless they experience a qualifying event (i.e. marital status change, change in number of dependents, change in daycare provider) as determined by their employer.


Payroll deductions from this account are free of federal, state and (in most cases) FICA taxes. Employees who participate in the Dependent Daycare FSA will see their pre-tax deductions represented in box 10 of their W-2. In addition, participants will be prompted to supply information about their daycare provider (name, address and tax ID number) on Form 2441 or Schedule 2 of their income tax return. Please consult a tax professional for questions regarding income tax preparation.


Participants cannot take both the Dependent Daycare FSA deduction and the income tax return deduction for the same expense! Some employees might be better off taking the Federal Tax Credit, depending on their income level, the income level of their spouse and their number of dependents. Typically, the Dependent Daycare FSA provides more tax relief than the Federal Tax Credit if an employee's taxable family income exceeds $26,000 per year.


Reimbursements are received by faxing, emailing or mailing claim forms and supporting documentation to Chard Snyder. Supporting documentation can be a signed statement from the daycare provider with the dates of service, the dependent's name and the amount. The daycare provider must also provide their name, address and tax ID number (or social security number, if an individual). Services must be incurred while both the participant and spouse are working (unless a spouse is disabled). After the claim has been reviewed and the expense approved, payment is then issued to the participant via direct deposit or a check. Claims are processed daily and payments are issued at least once per week.


Reimbursements are only issued for eligible expenses incurred by participants' dependents. Any funds remaining in the account at the end of the plan year and after the corresponding grace period are forfeited.


The employer determines eligibility for this benefit (within discrimination requirements) and the maximum and minimum contributions allowed. Participant elections for the Dependent Daycare FSA are also limited by the following IRS requirements:

 

Limited Healthcare Flexible Spending Account (FSA)

The Limited Healthcare Flexible Spending Account allows for out-of-pocket dental, vision and preventative care expenses to be paid for on a pre-tax basis. These expenses have been limited so that enrollment is compatible with eligibility rules related to Health Savings Accounts. Participant elections are payroll deducted and placed in a special account for reimbursements to be issued as claims are incurred. Participants are able to receive their full election amounts anytime during the plan year. Participants cannot change their individual elections unless they experience a qualifying event (i.e. marital status change, change in number of dependents) as determined by their employer.

There is no income tax reporting required when participating in this account. The payroll deductions are free of federal, state and (in most cases) FICA taxes and do not even appear on a W-2 as reported income.

Reimbursements are received by faxing, emailing or mailing claims and supporting documentation to Chard Snyder. Supporting documentation can be a receipt, a bill, an explanation of benefits summary and/or any documentation that provides the date of service, the type of service and the amount. After the claim has been reviewed and the expense approved, payment is then issued to the participant via direct deposit or a check. Claims are processed daily and payments are issued at least once per week.

Reimbursements are only issued for eligible expenses incurred by the participant, their spouse or their eligible dependents. Any funds remaining in the account at the end of the plan year and after the corresponding grace period are forfeited.


The employer determines eligibility for this benefit (within discrimination requirements ) and the maximum and minimum contributions allowed.

 

FSA Infomation Video

FSAwoman
FSA Eligible Expenses and Items