2013 Changes to Healthcare Flexible Spending Accounts
Per the Internal Revenue Service's guidelines, the maximum amount that you are allowed to contribute to the Flexible Spending Health Care Account has been reduced to $2,500. FSA funds for 2013 must have incurred dates in 2013 to be eligible.
* Maximum contributions are reviewed and set by the Internal Revenue Service on a yearly basis.
How a Healthcare Flexible Spending Account (FSA) Works
Like the Health Savings Account (HSA), the Healthcare Flexible Spending Account allows you to set aside pre-tax money from your paycheck to pay for eligible health care expenses, so you pay less tax per paycheck. You can have a Healthcare Flexible Spending account with the YourChoice Plan with Health Reimbursement Account (HRA) or if you are not enrolled in a Mohawk medical plan. Please note that the IRS does not allow individuals with Health Savings Accounts to also have a Healthcare Flexible Spending Account.
- A set amount of money that you determine is taken out of each paycheck and deposited into an account. Federal Income and Social Security taxes will not be withheld from your contributions.
- Your annual before-tax FSA contributions are deducted from your pay in equal amounts during the plan year of January 1, 2013 to December 31, 2013. The maximum annual contribution to the Healthcare FSA has changed to $2,500 per the IRS 2013 guidelines.
- Use the money in this account to pay for eligible out-of-pocket health care, dental and vision expenses for yourself, your spouse, your children or for any person you claim as a dependent on your federal income tax return. Expenses include deductibles, coinsurance and co-pays. See a list of eligible expenses below.
- A debit card will be sent to you which provides a convenient way to pay for eligible expenses and eliminates the need to file claim forms or paying out of pocket at health providers that accept the debit card. For those providers who do not accept the debit card, you will pay at the time of transaction and complete a claim form to request reimbursement.
- The Federal guidelines for filing FSA claims has changed, so keep in mind that you can use your Healthcare FSA for expenses (including deductibles, coinsurance and copays) incurred between January 1, 2013 and December 31, 2013. FSA funds do not roll over from year to year, so if you do not submit an FSA expense by March 31, 2014 (for expenses incurred 1/1/13 - 12/31/13), you will lose the 2013 FSA funds.
- As required by healthcare reform legislation, effective January 1, 2011, FSA funds can no longer be used to purchase over-the-counter medicine and drugs without a prescription from your doctor. If you have a prescription for an over-the-counter medicine, you must pay out of pocket at point of sale and then submit a claim requesting reimbursement. If you do not have a prescription for an over-the-counter medicine, you must pay out of pocket for the item. The over-the-counter medications affected by this change include acid controllers, allergy & sinus, baby rash ointments/creams, pain relief, sleep aids and more.
- You can continue using FSA funds to purchase over-the-counter items that are not considered a medicine or drug, such as bandages, splints and contact lens solution, among other items.
Eligible and Ineligible Medical Expenses (or visit the IRS site here for complete searchable list)
*Note that this list is based on forthcoming federal guidelines and may change at any time.
Important Guidelines for the Use of FSA Funds to Purchase Over-the-Counter Products
|Examples of Eligible FSA Expenses
Deductibles; copays from your medical; prescription drug;
dental or vision plans; acupuncture; birth control pills;
braces (orthodontics); dental expenses
(exams, cleanings, X-rays, root canals);
hearing aids and batteries; vision expenses
(eyeglasses, contact lenses or prescription sunglasses over the amount covered by the vision plan).
|Examples of Ineligible FSA Expenses
Non-medically supervised programs to stop smoking or lose weight
Non-medically necessary cosmetic surgery
Premiums for other medical plans
Dietary supplements and cosmetic remedies
* Assumes Standard deductions and four exemptions.
** Varies, assumes 3%
* This data is an illustration and does not guarantee the savings an individual may realize from an FSA account
Additional Healthcare Flexible Spending Account Details
- The Internal Revenue Service (IRS) governs FSA plans.
- If you take a federal tax deduction because your unreimbursed medical expenses exceed 7½% of your adjusted gross income, you may not claim the same expense on your FSA.
- If you leave your job, your contributions will end with your last paycheck unless you elect COBRA coverage under the FSA and contribute after-tax money. If you have funds left in the FSA when you leave and you do not elect COBRA, you can continue to be reimbursed for expenses incurred before your termination date.
Need Help Identifying Your Expenses?
EPSI administers the FSA. They offer an “expense calculator” under the “Education Center” tab at www.mybenny.com to help Mohawk employees identify routine and predictable expenses.