Is a Flexible Spending Account the Right Choice for 2013?
Participating in a Flexible Spending Account (FSA) is a great way to save money in 2013. There are two types of FSAs that you can choose to participate in as you are an eligible full-time faculty or staff member:
- Health Care FSA
- Dependent Care FSA
Based on your anticipated health care and dependent care needs, you make pre-tax contributions out of your pay check each pay period to your account(s). Then, you use the money in your accounts to pay for eligible health and/or dependent care expenses throughout the year. Some examples of eligible health care FSA expenses include:
- Prescription drugs
- Eyeglasses/contact lenses
- Coinsurance not covered by your health plan
Eligible dependent care expenses include any qualified expenses that enable you or your spouse (if you are married) to work or attend school full time. For a list of eligible expenses for both FSAs, go to the Benefits website.
This year (as a result of Health Care Reform), there will be a $2,500 cap on contributions to your Health Care FSA. The maximum for Dependent Care FSAs is still $5,000 annually per family. Keep in mind that IRS regulations require that expenses incurred during a calendar year must be reimbursed by April 30 of the following year. Any unused funds will be forfeited.