Money :: Flexible Spending Accounts

Flexible Spending Accounts

Health Care FSA

If you enroll in the Basic PPO or Classic PPO, you can open a Health Care FSA and contribute up to $2,750 tax free from your paycheck to reimburse yourself for out-of-pocket expenses, such as your portion of the medical deductible, prescription drugs, and eligible dental and vision expenses. The full amount you elect during enrollment is available, so you can start reimbursing yourself for eligible expenses from this account immediately.

If you enroll in a Health Care FSA for 2021, you can incur eligible expenses through December 31, 2021. All claims must be submitted to and received by PayFlex by March 31, 2022 to qualify for reimbursement. Any remaining balance will be forfeited. (PayFlex will take over the administration of the Health Care FSA from WageWorks beginning January 1, 2021.)

Dependent Day Care FSA

The Dependent Day Care FSA allows you to set aside up to $5,000 if married filing jointly (up to $2,500 if married filing separately) tax free for eligible day care costs for children under age 13 or dependent parents. This account cannot be used to reimburse health care expenses for your dependents — only to reimburse the cost of day care for your eligible dependents. Day care expenses include nursery schools, day care centers, adult day care centers, in-home providers and before- and after-school care.

You can contribute up to the IRS maximum through payroll deductions. Unlike the Health Care FSA, you can only be reimbursed with money actually in your account. This means you may want to wait before submitting your expenses until you have accumulated enough money in your account. You can incur eligible expenses through December 31, 2021. All claims must be submitted to and received by PayFlex by March 31, 2022 to qualify for reimbursement. Any remaining balance will be forfeited. (PayFlex will take over the administration of the Dependent Day Care FSA from WageWorks beginning January 1, 2021.)

Please note: The IRS limits the amount highly compensated employees can contribute to the Dependent Day Care FSA. If your annual pay is $130,000 or more, your contributions will be capped at $750 in 2021.

Regardless of your income, consider consulting your tax advisor on how to get the full child care tax credit on your tax return.

Consider a Flexible Spending Account

Watch this video to learn how to manage your account and how FSAs save you money on health care and dependent day care expenses.

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