Flexible Spending Account FAQs

1. How can I find a list of qualifying and non-qualifying expenses?
2. Can I participate in the FSA if I am enrolled in the Health Savings Account Option?
3. What is the Limited Health Care FSA?
4. How much will I save in taxes each year by participating?
5. What is the maximum I can contribute?
6. Who is a qualifying dependent under the Dependent Care Reimbursement Account?
7. Can I participate in the Flexible Spending Account Dependent Care Reimbursement plan and take the Child Care Credit on my Federal Income Tax return?
8. Is there a deadline for submitting claims?
   Debit Card Questions:
9. Am I eligible for the debit card?
10. How do I elect the debit card?
11. Do I have to use the debit card if I elect it?
12. Is there a cost associated with the debit card?
13. When can I use the debit card?
14. If I use the debit card at a store or at the doctor, will I still need to submit paperwork to ASI?

1. How can I find a list of qualifying and non-qualifying expenses?

A list of qualifying and non-qualifying expenses for both the Health Care and Dependent Care FSA can be found on ASI’s website.

2. Can I participate in the FSA if I am enrolled in the Health Savings Account Option?

If you are enrolled in the Health Savings Account Option for your medical plan, you may enroll in the Limited Health Care FSA and the Dependent Care FSA.

3. What is the Limited Health Care FSA?

The Limited Health Care FSA is for employees enrolled in the Health Savings Account Option (HSAO). It can be used to pay for qualified dental, vision and out-of-network preventive care expenses only. Preventive care includes periodic health evaluations (including tests and diagnostic procedures ordered in connection with routine exams), routine prenatal and well-child care, immunizations, tobacco cessation programs, obesity weight-loss programs, certain screening services, and prescriptions that are preventive in nature. Medical expenses other than preventive care are not eligible for reimbursement with the Limited Health Care FSA. Please contact the Arizona Department of Administration at 800-304-3687 for more detail on what services are defined as preventive.

4. How much will I save in taxes each year by participating?

Use ASI’s tax calculator to estimate your tax savings from enrolling in an FSA.

5. What is the maximum I can contribute?

The Health Care FSA maximum is $5,000. The Dependent Care FSA maximum is $5,000 per family, per plan year. ($2,500 if married filing separate Federal Income Tax returns.)

6. Who is a qualifying dependent under the Dependent Care Reimbursement Account?

Your dependent care expenses must be for the care of one or more qualifying persons.

A qualifying person is:

1. your dependent child who was under age 13 when the care was provided, for whom you have custody of more than 50% of the year, and who you can claim as an exemption on your Federal Income Tax return; or
2.  your dependent (child older than age 13, spouse, parent or other family member for whom you have custodial responsibility) who is physically or mentally unable to care for himself or herself, shares the same residence with you AND has income less than the federal exemption amount.

7. Can I participate in the Flexible Spending Account Dependent Care Reimbursement plan and take the Child Care Credit on my Federal Income Tax return?

You must choose whether to use the Child Care Credit or the Dependent Care FSA. The IRS will not allow you to receive two tax breaks on the same expenses.

You may claim a Child Care Credit on your tax return equal to your dependent care expenses (up to $6,000 per year for two or more dependents or $3,000 per year for one dependent) multiplied by a percentage. The percentage decreases from a high of 35% to a low of 20% as your household adjusted gross income increases.

The Dependent Care FSA is limited to $5,000 per year (for you and your spouse together), $2,500 if married filing separately, for any number of dependents. You will experience "tax savings" throughout the year with every paycheck you receive. If you are subject to the lowest federal tax rate, state taxes and Social Security taxes you will save around 27% of expenses through the Dependent Care FSA. If you pay a higher federal rate, you will receive an even higher tax break through the Dependent Care FSA.

Generally, those employees with a combined income over $30,000 or who spend more than $3,000 on care for only one qualifying child will save more through the Dependent Care FSA. Please contact your tax advisor if you have questions about which is best for you.

8. Is there a deadline for submitting claims?

Claims incurred during 2011 must be submitted by April 30, 2012.
Claims incurred during 2012 must be submitted by April 30, 2013.

 

Debit Card Questions

9. Am I eligible for the debit card?

The debit card is an option available to anyone who enrolls in the Health Care FSA. It is not available with the Limited Health Care FSA or the Dependent Care FSA.

10. How do I elect the debit card?

ASI will send debit card enrollment forms to your home address. If you wish to elect the debit card, completed forms should be returned to ASI. It will take approximately two weeks to receive your debit card once ASI has received your application.

11. Do I have to use the debit card if I elect it?

No, the debit card is optional. If you opt not to use it, you can submit claim forms and documentation to ASI for reimbursement.

12. Is there a cost associated with the debit card?

Yes, the debit card will cost $1 per month. The annual amount will be deducted from your Health Care FSA annual election in full and is non-refundable. You may elect the card at any time and will only be charged for the months remaining in the year at the time you elect the card. It is important to consider this cost when making an annual Health Care FSA pledge.

13. When can I use the debit card?

You can use the debit card to pay for qualified expenses at certain grocery stores and pharmacies or at doctors’ offices. The expenses will be debited from your Health Care FSA election. A complete listing of stores and pharmacies that can accept the debit card is on ASI’s website.

14. If I use the debit card at a store or at the doctor, will I still need to submit paperwork to ASI?

You may still need to submit follow-up documentation to ASI. Most co-pays and over-the-counter purchases can be electronically substantiated and will not require follow-up documentation. Other purchases and out-of-pocket expenses will require follow-up documentation. ASI will send a request to your home address if follow-up documentation is required. You should always keep your documentation even if ASI does not request it.