What is an FSA?
Flexible Spending Accounts (FSA) provide you with an important tax advantage that can help you pay health care expenses on a pretax basis. By anticipating your family’s health care and dependent care costs, you can lower
Your taxable income and that means you get to keep more of what you earn. The administrator for the FSA is BASIC. You will be issued a debit card to use for eligible expenses, or you can pay the provider and submit receipts for reimbursement from BASIC.
There are two types of FSA’s that allow you to make deductions to pay for expenses:
Healthcare FSA
Contributions
You may contribute up to $3,400* per year on a pre-tax basis to your Health Care FSA.
Eligible Dependents
In general, an eligible dependent under the Health Care FSA is anyone you list as a dependent on your federal income tax return. This includes your immediate family members, a close relative or other person whose primary residence is your home and for whom you provide over 50% support.
Dependent Care FSA
Contributions
In the Dependent Care FSA, you may contribute up to $7,500* per year. The $7,500 annual maximum applies to all contributions made by you and your spouse to a dependent care account. If you are married and filing separately for federal income tax purposes, you may elect to contribute up to $3,750 per year.
Eligible Dependents
You can be reimbursed for day care expenses you have in a plan year, if the expenses are necessary to allow you and your spouse—if you’re married—to work. These services may be provided inside or outside your home by babysitters, companions or eligible day care centers. Services may not, however, be provided by someone you claim as a dependent on your tax return.
Resources
IMPORTANT INFORMATION:
Both account types have a “use it or lose it” provision. For the Healthcare FSA you can carryover a maximum amount of $680* into the new plan year. Any money over this amount will be forfeited. The carryover amount can be used anytime during the new plan year.
For the Dependent Care FSA if you do not use all of the funds by the end of the current plan year the unused funds will be forfeited.
Therefore, it is very important that you have a good estimate of the expenses you will incur during the plan year. You cannot change this amount once elected unless you have a qualifying event. The change to the amount must be consistent with the reason for the qualifying event.
You must make a new election each plan year, even if you are keeping the amount the same as the previous plan year.
Go Mobile of 24/7 Access:
Download the free Basic NEO Mobile App for iPhone or Android. You can use the mobile app to check your FSA and Dependent Care FSA account balance, file new claims, view account activity and much more!