Frequently Asked Questions
What is a Flexible Spending Account?
A Flexible Spending Account or an FSA allows you to pay for eligible expenses with money that is tax free. Every pay period you contribute to your FSA with pre tax dollars which subsequently lowers your taxable income. Currently there are three types of FSA’s: Regular health care FSA, Limited Purpose FSA and Dependent Care FSA.
Health Care FSA
A Health Care FSA allows you to pay for deemed eligible out of pocket expenses, such as medical, dental, vision, hearing and prescription drugs for you, your spouse and dependents. An out of pocket expense are those which are not covered by insurance or any other plan. These would typically include: Deductibles, co-pays, co insurance, and any over the counter items.
Dependent Care FSA
A dependent care FSA allows you to pay for eligible child or adult day care expenses and would include the following: normal day care, nursery school, preschool, before and after school programs, summer day camp and adult day care. Children being cared for must be under the age of 13 and adult care would be defined as a dependent who is unable to take care of him or herself and resides in the residence for a minimum of 6 months of the year.
Limited Purpose FSA
A Limited Purpose FSA allows you to pay for eligible dental and vision expenses which include prescriptions and over the counter purchases. You may enroll in a Limited Purpose FSA in you have a Health Savings Account. As expenses are deducted from a LFSA first, it may help you to save HSA funds for the future.
Why enroll in an FSA?
Savings is the primary reason, as the money you contribute is deducted from your pay on a pre tax basis. Spending pre tax dollars in effect reduces your taxable income so when you spend your FSA funds, it is the equivalent of saving 30 cents on each and every dollar you spend.
What can I expect to save in taxes with an FSA?
When your FSA is in place, money is deducted from each pay period on a pre tax basis. What that means to you is your funds are withdrawn first before any taxes ( Federal, Social Security, State) are deducted. With Federal taxes ranging from 15 to 28 percent and Social Security currently at 7.65 percent, it is widely calculated and accepted that your savings ranges 30 to 49 cents on every dollar you spend for eligible expenses.
Example: Consider an annual salary of $50,000 with $2500 contribution to a healthcare FSA and $2000 to a dependent care FSA. With pre-tax deductions, you could save $1019.00
These calculations are based on 15% tax bracket and 7.65% FICA.
How does an FSA work?
Set aside the dollar amount you anticipate spending during the plan year on eligible out of pocket expenses. Select the appropriate FSA for you and then choose the amount you want to contribute based on your calculations. Your employer will then deduct this amount from your paycheck for each pay period. Different plans have different maximum contributions limits which you will find listed here.
When the funds are in your FSA you can begin to use your First Concord account debit card to pay for your eligible expenses. Or, you may pay the expense out of pocket and submit a claim to pay yourself back. You are able to do this online, through contact with our office or conveniently through our mobile app.
Dollars contributed to an FSA are tax-free. This means when you pay for eligible expenses through your FSA, you are in essence saving approximately 30 to 49 cents on every dollar.
Is there a limit on how much I can contribute?
Yes there is. Here are the current limits set by the IRS. They are subject to change annually. Likewise, your employer may choose to set a lower limit, so refer to your specific plan before making your contributions. Limits apply to each FSA participant. This means that if both you and your spouse are able to participate in a health care FSA, you may each do so up to the current IRS limit.
Health Care FSA contribution limit - $2,650
Limited Purpose FSA contribution limit - $2,650
Dependent Care FSA contribution limit -$5,000
How may I use the money?
When funds are within your FSA, you may use your HSA debit card, to pay for your eligible expenses. Or you may pay through credit card, cash or check and submit a claim to FCBG for reimbursement.
How do I file a claim for my FSA?
After you have an eligible expense, you may:
Submit your claim via the First Concord Benefits Group mobile app
Submit your claim online through our client log-in site.
I received a bill for an estimated amount. Should I pay this amount?
No. When you receive a bill with an estimated amount, that is indicative that the actual amount is yet unknown. The prudent thing to do is wait until your plan pays your claim and determines how much you will really owe. In addition, your plan will send you an EOB (explanation of benefits) or a statement showing the true amount owed.
Once you have the amount in hand, feel free to pay the bill using your HSA debit card.
What happens if I have funds left in my FSA at the end of the plan year?
Funds left in an FSA at the end of the year are forfeited. This is known as the FSA “use it or lose it” ruling. Your specific plan may or may not contain a “grace period” or what is known as a “carryover” feature which may help reduce the cost of forfeiture.
What is a grace period?
A grace period extends the amount of time that you may incur eligible expenses. It can extend your plan for up to two months and 15 days. Your employer chooses whether or not to offer a grace period with your specific plan.