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.
How
does the Health Care Spending Account work?
If
eligible, you may contribute any amount from $150 to $3,000 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 dental implants, orthodontia, fees paid to
non-participating providers, copayments, deductibles, laser eye surgery,
contact lenses, and braille books and magazines.
To
enroll in the HCSAccount you must estimate your annual out-of-pocket
costs, 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
2005 open enrollment period for the HCSAccount is 9/27-11/10/04. A streamlined
enrollment process allows you to enroll on-line at www.flexspend.state.ny.us.
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.
PEF
negotiated reimbursement for over-the-counter (OTC) drugs and supplies
through the Health Care Spending Account in the 2003-2007 PS&T
contract. Reimbursement of OTC drugs will be available on 11/1/04 for
current HCSAccount enrollees, and effective 1/1/05 for 2005 enrollees.
Information about drugs and other items that are considered eligible for
reimbursement is available at www.flexspend.state.ny.us.
PEF
also negotiated the development and implementation of a debit card for the
HCSAccount. A debit card can be used anyplace a credit card is accepted,
enabling enrollees to deduct funds directly to pay for qualified expenses
and eliminating paperwork.
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.
The
2003-2007 PS&T contract includes employer contributions that will
resume on 1/1/05 at the following levels:
Up
to $35,000
$600
$35,001
- $45,000
$500
$45,001
- $55,000
$400
$55,001
- $65,000
$300
Over
$65,000
$200
Examples
of expenses eligible for DCAAccount reimbursement include child care
expenses (up to 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).