Flexible Spending Accounts
Flexible spending accounts allow you to use tax-free dollars to pay eligible health care and day care expenses. These are optional benefits that permit you to set aside pre-tax dollars deducted from your paycheck. When you have eligible expenses, you’re reimbursed from your account. It’s your money going into the account and your money coming out, but the advantage is that the money is never taxed.
Health Care Spending Account
- Contribute up to $2,750 per year for eligible expenses not covered by the Health Plan, like extensive orthodontia work or special vision care services.
- You must plan carefully. While the IRS permits you to carry over up to $550 to use in the following year, any unused amount over $550 will be forfeited.
Dependent Care Spending Account
- Contribute up to $5,000 per year for day care expenses for children under age 13.
- You must plan carefully and use all your contributions within the year. The IRS does not permit you to carry over the unused balance.
The Summary Plan Description (SPD) has more details about this benefit, such as: