The Flexible Spending Accounts (FSA) program lets you pay for certain expenses with tax-free money. When you choose to participate, you elect to have a portion of your salary deducted from each of your paychecks, before it is taxed, and directed to your flexible spending account(s).
This untaxed money is then available to reimburse you for certain out-of-pocket health care expenses and dependent care services provided during the plan year.
You may enroll within 31 days of becoming a full-time, benefits-eligible employee or during the annual College-designated open enrollment period in three types of Flexible Spending Accounts: the General Purpose Spending Account, the Limited Purpose Spending Account (for use by those enrolled in the Choice Plan; only unreimbursed dental and vision expenses may be reimbursed) and the Dependent Care Spending Account. For all of the accounts, you will estimate the amount of your unreimbursed expenses for the plan year (July 1 to June 30). These annual estimates are deducted in equal installments from your paychecks over the year on a pre-tax basis. An annual maximum of $5,000 may be set aside in either the General Purpose FSA or the Limited Purpose FSA. You may also set aside an annual maximum of $5,000 in the Dependent Care FSA. Your FlexPro debit card may be used at participating merchants to pay for eligible expenses at the time of service or you can submit receipts for eligible expenses to Ivy Tech’s third party administrator to receive reimbursement from your accounts.
By enrolling in either the General Purpose FSA or Limited Purpose FSA program, you set aside pre-tax dollars to pay for eligible out-of-pocket health care expenses that are not covered by your other benefit plans. And, you can get the same pre-tax savings by opening a Dependent Care FSA to pay for childcare expenses.
Eligible health care expenses include, but are not limited to, out-of-pocket health, dental, vision and hearing expenses, as well as prescription drugs, certain over-the-counter medications*, deductibles and co-payments for you or any member of your immediate family, regardless of whether or not they are covered by an Ivy Tech benefit plan. *Effective January 1, 2011, over-the-counter medications will no longer be reimbursable through your FSA without a physician’s prescription.
Eligible dependent care expenses include care for children under age 13 that is necessary in order for you to work. With the exception of dependent care centers, child care providers do not have to be licensed, but they must be claiming earnings for taxation purposes and provide you with a receipt. However, dependent care centers (providing care for more than six individuals) must comply with all applicable state and local laws, including applicable licensing requirements.
When estimating your expenses, please be conservative with the dollar amounts you set aside in these accounts. If, at the end of the plan year, there are any unclaimed dollars in your accounts, this amount is subject to the IRS's "use it or lose it" rule. Any such unclaimed money will be forfeited if you do not spend the entire amount you have allocated. If you have expenses, please do not let this intimidate you from participating. Simply look at expenses you know you will incur and estimate conservatively.
Elections for Flexible Spending Accounts are irrevocable during the plan year unless a change is permitted under the terms of the Plan. See the permitted election change discussion under the Tax Saver Program above.
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