using healthcare and dependent care flexible spending accounts an fsa = an opportunity to save
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Using Healthcare and Dependent Care Flexible Spending AccountsAn FSA = An Opportunity to Save
Imagine…
There is $300 in the HR office for every employee to pick up, no strings attached.
How many of youwould pass that up?
©2009. ADP. Confidential Material.
Got one of these?
©2009. ADP. Confidential Material.
Want your software at a discount?
©2009. ADP. Confidential Material.
How about great savings on hardware?
©2009. ADP. Confidential Material.
©2009. ADP. Confidential Material.
What is a Flexible Spending Account (FSA)?
• Two types:• Healthcare
• Dependent Care
• You do not pay federal income tax on the funds in your account. It’s like getting a coupon for a discount up to 40%.
• Determine amount you want deducted from your paycheck
• Money is put into your account before taxesare taken out
How does it work?
• It saves you money
• It isn’t tied to a certain kind of healthcare plan, like a high deductible plan
• It’s easy to use
©2009. ADP. Confidential Material.
Why should I use an FSA?
• Use the funds in your FSA to pay for eligible expenses
• FSA funds don’t carry over to the next year and you have to re-enroll every year
• It’s easier than you might think to spend all your FSA dollars
©2009. ADP. Confidential Material.
How do I get my money back?
©2009. ADP. Confidential Material.
Tax Saving Example
Or, how can bringing home less of my paycheck help me get more for my money?
By using her FSA, Kim brought home an additional $534 for the year!
Example of annual savings
With FSA Without FSA
Kim’s taxable income $55,000 $55,000
Pre-tax money depositedinto her FSA -$1,500 -$0
Kim’s remainingtaxable income $53,500 $55,000
Minus Federal, Medicareand Social Security taxes* -$19,073 -$19,607
Take-home pay spent onFSA-eligible health careexpenses -$0 -$1,500
Kim’s remainingtake-home pay $34,427 $33,893
©2009. ADP. Confidential Material.
Save BIG on Eligible Health Care FSA Expenses
• Examples of eligible expenses:
• Deductibles and co-payments
• Vision expenses (prescription eyeglasses, contact lenses)
• Dental expenses
• Prescription drugs
• Certain over-the-counter (OTC) drugs and medicines
• For a more comprehensive list, visit: www.flexdirect.adp.com.
Save on things you buy every day
©2009. ADP. Confidential Material.
Ineligible Health Care FSA Expenses
• Examples of ineligible expenses:
• Cosmetic surgery
• Teeth bleaching
• Health club memberships
• Insurance premiums
• For a more comprehensive list, visit: www.flexdirect.adp.com
A few things can’t be reimbursed
©2009. ADP. Confidential Material.
Save BIG on Dependent Care FSA Expenses
• Daycare and after-school care for your children while you work
• If you’re married, your spouse must work, be a full-time student or be disabled
• A dependent is defined as:
• A child under age 13 (tax dependent)
• A spouse or tax dependent who is mentally or physically incapable of caring for himself
©2009. ADP. Confidential Material.
Dependent Care FSA Expenses
Eligible
• Licensed nursery schools (Pre-K and under)
• Day care centers
• Day camps
• Care inside your home
Ineligible
• Educational expenses for school-age children
• Overnight camps
• Food
• Transportation
• Extracurricular activities
©2009. ADP. Confidential Material.
When can I sign up?
• FSA elections can be made:
• During your employer’s annual Open Enrollment period
• When you initially meet eligibility requirements
• If you have a qualified status change (based on plan design), for example, a change in:
• Legal marital status
• Number of dependents
• Employment status
• Dependent who ceases to meet eligibility
©2009. ADP. Confidential Material.
Contributions
Healthcare
• Your employer determines plan maximum and minimum
Dependent Care
• Your employer determines plan maximum (no more than the IRS limit of $5,000 per family) and minimum
Note: Your annual election goal amount is evenly dividedamong your paychecks throughout the year
©2009. ADP. Confidential Material.
Reimbursements
Eligible expenses can be reimbursed:
1. After the service is delivered by submitting a claim form
2. Reimbursements are:
• Made via check or Direct Deposit reimbursement
• Processed based on your employer’s schedule
©2009. ADP. Confidential Material.
Additional Information
• www.flexdirect.adp.com
• 24-hour access to account information
• Claim forms
• Substantiation forms
• FAQs
• 1-800-654-6695
• 24-hour access to recorded account information
• Live representatives available 8 a.m. – 8 p.m. Eastern Time (Monday through Friday)
Sign up NOW to save on purchasesyou make every day!