With increases in many health insurance plans for 2010, the flexible spending account (FSA) is a great way for employees to reduce their taxable income while saving money to pay for health care costs that insurance doesn’t cover.
Open enrollment for the 2010 medical FSA is under way through Nov. 30. This is an account exempt from federal income taxes and Social Security (FICA) taxes. It allows employees to save money on eligible out-of-pocket medical expenses not only for themselves, but for their spouse and other dependents.
For 2010 the FSA annual minimum contribution is $240 and the maximum is $3,600.
The more money you save in your account, the more tax you avoid. Depending on your personal tax bracket, you could save 20 percent or more on your out-of-pocket medical expenses. To determine how much the FSA could save you in taxes, check out the Tax Savings Calculator at the bottom of the page at www.asiflex.com/pebb.
When you enroll in the FSA, you decide how much you want to contribute for the year. The money is deducted from your paycheck pre-tax in equal amounts over the plan year.
Once you incur expenses that qualify for reimbursement, you can either use your ASIFlex debit card to pay for the expenses or you can submit a paper claim form directly to ASI (the FSA vendor) to request reimbursement.
Once you are enrolled – effective Jan. 1 – you do not have to wait for your payroll deductions to accumulate before you file a claim for reimbursement. The full annual election amount is available effective Jan. 1.
In order to estimate your annual FSA amount, look at the list of qualifying expenses on the ASIFlex website at www.asiflex.com/pebb. Also look back at your medical expenses from last year.
Write down any additional eligible expenses you anticipate in the upcoming year. Include items such as plan deductibles for you and your qualified dependants, co-pays, co-insurance, as well as over-the-counter medications such as cough syrup, aspirin and band-aids.
Your insurance premiums are collected from your paycheck on a pre-tax basis and are not an expense you can claim on your FSA.
Also, refer to the Washington Flex Enrollment Guide at https://www.hrs.wsu.edu/Flexible%20Spending%20Account regarding the deadline for submitting claims and other important rules.
This is a “use it or lose it” benefit, so be careful not to over-estimate what you think you may need.
To participate in the FSA for 2010, first-time and returning participants MUST return the 2010 enrollment form to Human Resource Services on or before the Nov. 30 deadline. This is the only opportunity to enroll in the FSA for 2010.
FSA enrollment forms are available on the HRS website www.hrs.wsu.edu by clicking on Open Enrollment under the Latest News link on the right side of the page. Enrollment forms also are available at the HRS office in French Administration 139 on the Pullman campus and at regional HRS offices on the Spokane, Tri-Cities and Vancouver campuses.
