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Flexible Spending Account

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Do you have predictable healthcare or daycare expenses? If so, a Flexible Spending Account, or “FSA”, can save you money.  UMR is our FSA plan administrator.

An FSA allows you to set aside pre-tax dollars to pay for eligible out-of-pocket expenses.  When you participate in an FSA, you reduce your taxable income by the amount you anticipate you’ll spend out-of-pocket for eligible healthcare and daycare expenses. We offer two FSA plans:  Healthcare and Dependent Care.

Healthcare FSA

You can set aside as little as $120 or as much as $2,550 for the plan year. Whatever you elect is deducted from your paycheck evenly throughout the year on a pre-tax basis. Then you file claims to reimburse yourself from your account (funded with your money) when you have eligible healthcare expenses. Or you can use your “benny card” to pay for your expense directly from your FSA.  Many employees use a Healthcare FSA to pay for contact lenses and glasses (if not paid under Vision) and orthodontia. You can also use it to pay your copays, deductible and coinsurance under your medical and dental plans.

Dependent Care FSA

You may set aside as much $5,000 for the plan year. Just like a Healthcare FSA, whatever you elect is deducted from your paycheck over the year, on a pre-tax basis. But this account is used to reimburse yourself for childcare/daycare expenses that are needed because both you and your spouse work. Children must be under the age of 13. Note that if you do a Dependent Care FSA, you are not eligible to take the childcare credit for the same expenses when you file your tax returns.

Is there a risk?

As with most tax-favored benefits, there are some risks. First, once you elect to contribute to an FSA, you’re locked into it for the year. You can’t change or cancel your FSA mid-year unless you’re within a month of a qualifying event. The list of qualifying events for a Healthcare FSA is particularly short –  marriage, divorce, birth and death. Secondly, any money you have in your account after the plan year closes is forfeited, with the exception of $500 in a Healthcare FSA that can be carried-over. Thirdly, your election is only good for the year, meaning it automatically ends on December 31. You have to re-enroll each year to keep participating.

What else do I need to know?

How 2017 FSAs work (2016 version)
View this PowerPoint for more details on how FSAs work and why this may be a great option for you. You especially should view this if you’ve never participated in an FSA before. FSA’s are a great benefit. By doing a little bit of planning, you can save on your taxes. Consider this:  if you are in a 30% tax bracket, an FSA is like saving 30% on medical and daycare expenses.

$500 healthcare FSA carryover
Explains the new carryover option that went into effect the 2015 plan year.  It replaces the grace period for healthcare FSA balances.

Claim forms and other FSA forms are on the Benefits forms page.

UMR  info for your FSA

 

Benefit plan information on these web pages is in a summary format and is not intended to replace actual plan documents. UAMS reserves the right to amend or terminate all or any part of any benefit plan.