Enroll in the Flex Spending Account

The Flex Spending Account (FSA) is a program PEF offers to help staff save money on their taxes. The FSA has two benefits, the Health Care Flexible Spending Account (HCFSA) and the Dependent Care Benefit Account (DCBA)--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 HCFSA and/or DCBA.

If eligible, you may contribute any amount up to $1,500 annually (PEF will consider a higher amount if requested. Contact Cliff Merchant for details) in pre-tax dollars to pay for out-of-pocket medical, dental or vision costs not reimbursed by health insurance. Some examples of allowable costs are prescription drug copayments, dental charges, orthodontia, fees paid to non-participating providers, deductibles, laser eye surgery, and contact lenses.

Reimbursement for over-the-counter (OTC) drugs and supplies is available through the HCFSA. Some of the OTC drugs and supplies considered eligible for reimbursement include first aid products, cold and allergy medicines, ear and eye care products, pain relievers, denture adhesives, personal test kits, skin care, and stomach remedies.

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. Examples of expenses eligible for DCBA reimbursement include child care expenses (thru age 12), summer day camp, before/after school programs and adult day care.

To enroll in the HCFSA for either Health Care or Dependent Care Accounts or both, you must estimate your annual out-of-pocket costs, and 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.

Reminder: On 7/1/08, the following categories of dental benefits were enhanced:

Dental Service	Prior Benefit	Effective 7/1/08
Diagnostic & Preventive	80%	100%
Restorative (e.g., fillings)	50%	80%
Prosthetics	50%	80%
Periodontics	50%	80%
Annual Maximum	$1,200	$1,500

On 1/1/09, copays for Preferred and Non-preferred drugs will increase. The copays for generic drugs remain zero. The following table shows the changes.

Drug Category	Current 30-day Copay Retail	New 30-day Copay Retail	Current 31-90 Days Retail	New 31-90 Days Retail	Current 1-90 Days Supply Mail Order	New 1-90 Days Supply Mail Order
Generic	0	0	0	0	0	0
Preferred	$15	$20	$30	$40	$20	$25
Non-preferred	$30	$35	$60	$70	$55	$60

Once enrolled you can fill out an electronic claim form online, mail or fax claims, then receive reimbursement by check or direct deposit. If you use the debit card, you may be asked to submit a copy of a receipt to verify that a card transaction was for a qualified expense. You can choose reimbursement by check or direct deposit into your bank account. The Take Care plan website http://www.takecareplans.com/cbp/home.asp gives you 24 hour access to your plan expense and reimbursement information.

Does the money have to be in my Health Care Flexible Spending Account before I use the debit card or file a claim?

No, the entire annual amount you elect for the HCFSA is available on the first day and throughout the plan year.

Does the money have to be in my Dependent Care Benefit Account before I file a claim?

Yes, only amounts contributed to date are available for reimbursement of dependent care. This is a requirement of the Internal Revenue Service.

A single employee earns $53,000, declares 2 dependents and files as head of household. The annual HCFSA contribution is $1,300 and the employee incurs $1,300 in reimbursable health care expenses.

	With HCFSA	Without HCFSA	Savings with HCFSA
Annual income	$53,000	$53,000
Expenses paid through HCFSA	-1,300	0
Adjusted gross income	$51,700	$53,000
Federal income tax	-4,701	-4,896	$195
NYS income tax	-2,124	-2,213	89
Social security tax	-3,955	-4,055	100
After-tax cost of health care expenses	0	-1,300
Your spendable income (assuming there are no other payroll deductions)	$40,920	$40,536	$384

This employee could save $384 in taxes by using the Health Care Flexible Spending Account!

The deadline to enroll is December 15, 2008. If you have questions about the Flexible Spending Account contact Deborah Stayman at x286 or dstayman@pef.org.