How much money will come out of my paycheck if I decide to participate?
You estimate your total annual expenses for each of the accounts you decide to participate in. This amount is then divided by the number of times insurance deductions are taken out of your paychecks for the calendar year. (For example, a $520 plan year election divided by 26 pay periods = $20 per pay check.)
Does the plan cover my family?
Yes! Any tax dependent in your family that is not covered by a Health Savings Account (HSA) can be covered under the flexible spending account. Even if you are not covered under SPPS health insurance plan, you can still set aside money for your out-of-pocket medical, dental, optical, and dependent care expenses.
Do I have to participate in both the medical and dependent care flex plans?
No. You design the flexible spending benefit plan to fit your specific needs. You may use medical reimbursement or dependent care or both. Participation in the plan is voluntary, but if you plan to participate, annual enrollment is required.
Can I participate in flexible spending if I have a health savings account (HSA)?
If you are covered under a health savings account, you can only participate in the dependent care reimbursement, not the medical reimbursement account.
What happens if I don't use all of the money I have set aside?
Any funds remaining at the end of the plan year are subject to the “use it or lose it” provisions of the regulations governing the benefit. Remaining balances may not be refunded or “rolled over” to a future plan year. It is extremely important to be conservative in your estimates of eligible expenses. The benefits department recommends that you use the insurance cost calculator to assist in your determination of eligible medical expenses.
If I have money left in one flex account and have run out of money in the other, can I use the money for another account?
Under IRS regulations, each FSA is separate and not interchangeable. Dependent care may only be reimbursed under the dependent care FSA and medical expenses may only be reimbursed through the medical FSA.
Can I change my elections at any time?
Once the plan year begins, you cannot adjust your elections until the following plan year unless you experience a qualified change in family status. Situations may include, but are not limited to marriage, divorce, legal separation, birth or adoption of a child, death of a spouse or child, change of employment status of employee or spouse, or change in daycare providers. There is a 30-day window from the date of a qualifying family status change to modify your election amount.
How am I reimbursed for expenses?
The third party administrator will automatically reimburse certain medical expenses such as co-pays and deductible amounts, unless you opt out of this automated reimbursement. You must opt out of the automated reimbursement if you are dual covered under a spouse’s plan, or if you have a non-tax dependent covered on your plan. To receive reimbursement for your other medical expenses (i.e. over the counter medicines) or dependent care expenses, you would submit a reimbursement form to the third party administrator (HealthPartners) along with a copy of your bills, receipts or EOB statements. The expense must be incurred (the service must happen) during the plan year. NOTE: Cancelled checks and balance due statements are not acceptable proof of service because they do not indicate the incurred date of the expense.
Where do I send my reimbursement claims?
Reimbursement claims can be faxed to HealthPartners at (952) 883-5026 or mailed to HealthPartners Service Center at Mail Stop 21104A, PO Box 1309, Minneapolis MN 55440-1309.
How soon can I expect to receive my reimbursement check?
Claims are processed weekly and reimbursement checks are sent on Fridays. The checks are always issued to you and cannot be issued to pay your providers directly. Direct deposits are on Fridays also.
If I participate in this plan, can I still receive tax credits and itemize medical deductions on my tax return?
By participating in the un-reimbursed medical FSA and the premium conversion portion of the plan, you are already receiving the tax savings on the expenses and are unable to claim them again on your tax return. In order to itemize deductions on your tax return, your medical expenses have to be a minimum of 7.5% of your gross earnings. Most people are unable to qualify for the deduction unless they experience a catastrophic loss. For certain expenses such as child care, we recommend you consult with your tax advisor to determine which option best fits your personal situation. You may use a combination of the Dependent Care FSA and the Federal Child Care Tax Credit, but you are limited by the maximum as defined under the Federal Child Care Tax Credit. Participation in a flexible benefit plan prohibits you from taking the earned income credit.
Is participating in the dependent care flex better than taking the tax credit?
Changes to the IRS guidelines regarding dependent care flexible spending accounts make it financially advantageous for some people to take a tax credit every year instead of participating in the flexible spending plan. It is recommended that you consult your financial/tax advisor to determine which is better for your situation.
How will my participation in this plan affect my taxes at the end of the year and will I have to do anything differently when filing my tax return?
The amount of taxable wages reported on your W2 will automatically be reduced to reflect the amounts you elected for pre-tax deduction under the plan. You simply use the amount shown on the W2 as taxable income and complete your return as normal. Dependent Care participants however, must also attach Schedule 2441 to the tax return, reporting the name of the dependent care provider, their tax ID number, and the amount deducted pre-tax for dependent care. The pre-tax deduction amount will appear in a special box on the W2 form.
Will participation in flex affect my social security retirement benefits later on?
Since your wage base is reduced by the amount you elect to deduct pre-tax, the contribution to Social Security is less and may affect your benefits if you become disabled or retire. Because the reduction is generally minimal, investing a portion of your tax savings in a TSA plan will offset the possible reduction in benefits.