Flexible Spending Account

A Flexible Spending Account (FSA) is an employer owned account that lets you set aside pre-tax dollars (which lowers your taxable income) to pay for eligible out-of-pocket expenses.

There are three types of FSAs:
•  Healthcare FSA – Can be used to pay eligible medical, dental, orthodontia and vision expenses
•  Limited Purpose FSA – Can be used in tandem with an HSA to pay eligible dental, orthodontia and vision expenses
•  Dependent Care – Can be used to pay eligible expenses for childcare, eldercare or care for a disabled dependent

Use It or Lose It
Carefully estimate your out-of-pocket expenses when determining your pre-tax contribution to an FSA. The IRS requires any balance remaining at the end of the plan year to be forfeited back to AMU to defray administrative expenses related to the plan.

There is a two-and-a-half month grace period for the Healthcare FSA and Limited Purpose FSA. Dependent Care FSA funds must be used before the plan year ends.

Important notes regarding Flexible Spending Account Plans:
• If you have elected to have money set aside in this account before taxes are calculated, you may not change your plan elections until the end of the plan year, December 31st, unless there is a significant change in your
family status (marriage, divorce, death of spouse, birth of child, termination of spouse’s employment, or a significant change in your spouse’s health coverage). If a change in status occurs, you may make changes consistent with the qualifying event.
• You must request reimbursement of expenses incurred during the plan year within 90 days of your termination date. The IRS requires that any unused funds be forfeited.