How to Change Your FSA Withholding $$$

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.

The 2004 open enrollment period for the HCSAccount and the DCAAccount ended on 11/13/03. However, some PEF members enrolled in Blue Choice found out too late that their copays will increase in 2004. They wanted to withhold more pre-tax dollars in their HCSAccounts to pay for the copay increases.

There is a way for any enrollee in the HCSAccount and the DCAAccount to change the amount of withholding after enrollment is completed. Please read the steps below.

1. Everyone who enrolled in either the HCSAccount or DCAAccount will receive a confirmation notice in early December. This is the normal practice for the program, as it affords enrollees one last opportunity to make corrections to their enrollment information.

2. Anyone who wishes to do so may change their election amount in December, as long as they send the changes by the deadline specified in the letter. The changes must be faxed or postmarked by December 17, 2003.

3. Enrollees can both increase or decrease their election amount. Enrollees are even permitted to reduce their election amount to zero if they wish.

The IRS recently issued a ruling that permits flexible spending accounts to reimburse the cost of over-the-counter medications that are purchased to treat personal injuries or illness. However, GOER is awaiting further clarification of the IRS ruling before implementing this change under the Health Care Spending Account. As a result, HCSAccount will not reimburse over-the-counter medications at this time.