Flexible Spending Accountsunderstanding flexible spending accounts, faqs and more

Flexible Spending Accounts, or FSAs, allow money to be deducted from an employee’s pay on a pre-tax basis for allowable medical, dental, vision, eligible dependent care expenses or other eligible expenses.

FSAs offer a tax advantaged benefit to employees, by lowering the amount of payroll taxes paid. Other advantages of a flexible spending account include:

  1. Pre-Funding – Medical FSAs are pre-funded by the employer, which means that regardless of the amount you set aside each pay period, the entire total of your annual contributions is available for use immediately.
  2. Tax Savings – As an example, with flexible spending, deducting $2,000 per year from taxable income and depositing it into a medical FSA can result in annual tax savings of nearly $750.

Contributions to a Flexible Spending Accountdetermining flex contributions

J.P. Farley’s Flexible Spending Account Worksheet will help you determine how much money you should contribute to your FSA for the plan year.

The health care FSA contribution limit is $2,700 for 2019. Consistent with this rule, if each of two spouses is eligible to elect salary reduction contributions to a FSA, each spouse may elect to make salary reduction contributions of up to the allowed annual election to his/her health FSA, even if both participate in a health FSA sponsored by the same employer. (Note: if you are also enrolled in an HSA you may only participate in a limited purpose FSA.).

The dependent care account is federally capped at $5,000 per year. While married spouses can each elect to have this amount deducted from their paycheck and applied to expenses, all withdrawals over $5,000 are taxed (this is $5,000 for couples filing jointly or $2,500 for those filing separately). Unmarried couples can each deduct and use $5,000. Unlike medical FSAs, DCAs cannot be pre-funded. Employees can only be reimbursed as funds are deposited into the FSA. If married, BOTH spouses must earn income in order for the Dependent Care FSA to work. The only exception is if the non-earning spouse is disabled or a student. If one spouse earns less than $5,000, the benefit is limited to whatever that spouse earned.

Spending Your Flexible Spending Account

Health Care FSA Expenses
Medical FSAs are commonly used to pay for deductibles, co-payments and coinsurance for the medical plan, but may also include expenses not covered by the health plan, such as dental and vision expenses. A health care FSA cannot pay for health insurance premiums, cosmetic items, cosmetic surgery or items that improve “general” health.

All items reimbursed must be intended to treat or prevent a specific medical condition such as pregnancy, diabetes or a skin cut. Generally, allowable items are the same as those qualifying for a medical or dental expense tax deduction (IRS Publication 502, Medical & Dental Expenses) as well as other FSA eligible expenses.

  • Over-the-counter drugs cannot be reimbursed without a prescription
  • HSA participants may only participate in a Limited Purpose FSA and not be reimbursed for expenses eligible for reimbursement under their HSA plan

Reimbursement From Your Flexible Spending Account

Eligible Expenses
If you have access to an FSA debit card, you may access additional information regarding your account here:

FSA Debit Card
If you have access to an FSA debit card, you may access additional information regarding your account here:

Reimbursement Request
You may use this process for your health care, dependent care or other flexible spending account eligible expenses.

  1. Complete the Flexible Spending Account Reimbursement Form.
  2. Provide supporting FSA documentation.
    • For Health Care Reimbursement Claim(s) – documentation includes a copy of the billing, a receipt which indicates the performance and payment of this service, a copy of an explanation of benefits form from your medical carrier or doctor’s prescription as applicable to your particular reimbursement request. Additional details are available on the reimbursement form.
    • For Dependent Care Reimbursement Claim(s) – supporting documentation must include the provider name, address and TIN or SSN, as well as the dependent’s name and date of birth and dates of service.
  3. Submit your Flexible Spending Reimbursement Request.
    • Submit FSA Reimbursement Request OnlineSUBMIT ONLINE! – this option allows you to submit your reimbursement request online through our Customer Support Center. Simply complete the online ‘ticket’ fields, attach your reimbursement form and the appropriate supporting documentation directly in your request. Once your claims has been reviewed you will receive an email letting you know the status of your request.
    • Submit FSA Reimbursement Request via US Mail – complete your reimbursement form and the appropriate supporting documentation and mail your request to the following address:
      Flexible Spending Department
      J.P. Farley Corporation
      P.O. Box 458022
      Westlake, OH 44145-8022

Helpful Downloads

Dependent Care
Account FAQs
Health Spending Account FAQs
HSA Interactions with FSAs & HRAs
HSA Contribution Worksheet
FSA Contribution Worksheet
FSA Reimbursement Form