Use the Flex Spending Account to Save $$$

The Flex Spending Account (FSA) is a program PEF and the state negotiated to help members save money on their taxes. The FSA has two benefits--the Health Care Spending Account (HCSAccount) and the Dependent Care Advantage Account (DCAAccount)--that help you pay for health care or dependent care with pre-tax dollars. Even if you enrolled last year you must enroll again this year.

Enrolling in either benefit is voluntary. Savings will vary depending on your annual income, the number of dependents you claim on your taxes, and the amount of money you contribute through payroll deductions to your HCSAccount and/or DCAAccount.

You may not pay directly for eligible expenses from these accounts. You must pay the expenses first and then submit claims for reimbursement from your HCSAccount or DCAAccount.

How does the Health Care Spending Account work? If eligible, you may contribute any amount from $100 to $4,000 annually in pre-tax dollars to pay for out-of-pocket medical, dental, vision, or hearing costs not reimbursed by health insurance. Some examples of allowable costs are prescription drug copayments, dental implants, and orthodontia fees paid to non-participating providers, deductibles, laser eye surgery and contact lenses.

Over-the-counter (OTC) drug expenses are reimbursable through the HCSAccount as long as the items are used to treat a medical condition or illness. General purpose items such as toothpaste, moisturizers, and lip balm are not eligible expenses. OTC drug claims must be submitted with a receipt that clearly states the name of the drug or supply, store name, purchase date, and price.

Changes to federal law limit OTC drug reimbursement. Over-the-counter drugs, medicines, and biologicals require a doctor’s prescription to be eligible for reimbursement under the HCSAccount. Other OTC products (e.g. hearing aid batteries, band-aids, contact lens solution, etc.) are not affected by the law.

What’s new in 2012? The plan rules regarding reimbursement of vitamins and dietary supplements under the HCSAccount have been clarified. Although vitamins and dietary supplements do not require a written prescription in order to be reimbursed, they must be recommended by a doctor to treat a medical condition.  A written letter of medical need must accompany claims for such expenses.

Breast pumps were also added to the list of eligible HCSAccount expenses.

How do I enroll? To enroll in the HCSAccount you must estimate your annual out-of-pocket costs, and then decide how much money to have withheld from your paycheck. It's important to estimate conservatively because if you don't file claims for reimbursement of the entire amount, you will lose any remaining funds. Once enrolled you can mail or fax claims, then receive reimbursement by check or direct deposit.

The online claims submission process enables enrollees to submit reimbursement requests for the Health Care Spending Account (HCSAccount) and the Dependent Care Advantage Account (DCAAccount) online through www.myFBMC.com.  The simple, two-step process allows enrollees to upload scanned images of completed claim forms along with scans of supporting documents.  Submitting reimbursement requests online is fast, easy and secure, and will speed the payment of FSA funds to enrollees.

The federal Defense of Marriage Act does not permit the state to treat a same-sex spouse as an eligible spouse under the Flex Spending Account.  As a result, a same-sex spouse’s health and dependent care expenses are not eligible for reimbursement, and a same-sex marriage is not a qualifying change in status event that would allow an employee to either enroll mid-year or change an annual election if already enrolled.

The 2012 open enrollment period for the HCSAccount is 10/14-11/14/11. An on-line enrollment process allows you to enroll at www.flexspend.ny.gov. There are no paper forms to mail in. You can also enroll by calling 1-800-358-7202 and a customer service representative will take your application. If you have additional questions you may email them to fsa@goer.ny.gov. 

How does the Dependent Care Advantage Account work? If you pay a caregiver to care for your child, elderly parent, or disabled spouse in order to work, you can set aside up to $5,000 in pre-tax salary through payroll deduction to help pay for these expenses. 

Examples of expenses eligible for DCAAccount reimbursement include child care expenses (under age 13), summer day camp, before/after school programs, adult day care, home aide, and housekeeper or cook (these last two must provide custodial care to be considered eligible expenses).  

If the 2011-2016 Tentative Agreement is ratified, the DCAAccount Employer Contribution will continue for 2012.  The amount of the Employer Contribution to DCAAcounts will vary based on income, as provided in Article 42 of the 2011-2016 Tentative Agreement, at rates that are currently under discussion between PEF and the state. For Employer Contribution updates, including updates on the precise amount of the 2012 Employer Contribution, visit www.flexspend.ny.gov or call 1-800-358-7202.  If the 2011-2016 Tentative Agreement is not ratified, an Employer Contribution will not be available for PEF represented DCAA participants unless and until a ratified agreement is reached. 

The 2012 open enrollment period for the DCAAccount is 10/14-11/14/11. You may enroll on-line at www.flexspend. ny.gov or by calling 1-800-358-7202. A customer service representative will take your application. If you have additional questions you may email them to fsa@goer.ny.gov.