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Human Resources
Human Resources

Flexible Spending Account

When you participate in your Butler-sponsored Flexible Spending Account (FSA), you elect to have a specified amount of money deducted from your paycheck on a pre-tax basis. FSAs may be elected with a PPO Medical Plan or with no plan election.

There are two popular FSAs that Butler provides through Discovery Benefits:

Medical Reimbursement FSA 

A Medical Reimbursement FSA, or Medical FSA for short, is used to pay for certain types of out-of-pocket medical expenses not covered under an insurance plan such as:

  • Co-pays
  • Deductibles
  • Dental and vision expenses
  • Lasik eye surgery
  • Prescription drugs
  • Some over-the-counter (OTC) items such as bandages, sunscreen, thermometers, and many more

To see a full list of FSA eligible items, log in to the Discovery Benefits website. Or visit the FSAStore to shop online for FSA-eligible items, making it simple to take the guesswork out of determining if an over-the-counter (OTC) purchase is a qualified expense.

Dependent Care FSA

A Dependent Care FSA is an account that can be used to pay for the daily care of an eligible child or adult dependent. Sometimes referred to as a Dependent Care Assistance Program, or DCA, this FSA allows you to use the funds in your account to pay for things like:

  • Daycare
  • Before and after school programs
  • Babysitting in your home by someone who is not your dependent
  • Care for a dependent adult (eldercare)
  • Nanny, nursery school, or pre-school expenses
  • Summer day camp

Learn more about these FSAs on the Discovery Benefits website.

How much can I contribute annually?

The annual contribution limits are set by the Internal Revenue Service (IRS) and are listed below.

 

2018 Contribution Limits

FSA ACCOUNT TYPE ANNUAL FSA LIMIT                                                                                                                                                        
Health Care FSA Contribution Limit $2,650
Health Care Carry-Over Limit (from 2017 to 2018, funds will transfer to 2018 on April 6, 2018) $500
Dependent Care FSA - individual or married filing jointly $5,000
Dependent Care FSA - married filing separately $2,500

 

How much should I contribute?

Everyone is different, so it's important to estimate how much you anticipate spending on eligible expenses before you set your contribution amount.

Log on to Discovery Benefits website to access the online calculator to assist you with estimating your anticipated expenses for the year.

What is the use-it or lose-it rule?

Per IRS regulations, any funds left in your Dependent Care FSA at the end of the year are forfeited—this is frequently referred to as the "use-it-or-lose-it" rule.

 

Thanks to changes in healthcare legislation, Health Care FSA accounts can have a carry-over amount of up to $500 each year. To learn more, check out our Rollover FAQs.

How do I access the money that I contribute toward my FSA?

The annual amount you choose to contribute is loaded onto a convenient to use FSA VISA debit card. You can use it to pay for medical visit co-pays, prescription co-pays, eligible dental and vision expenses, deductibles and other IRS-eligible expenses. The debit card eliminates paying expenses "out-of-pocket" and waiting for reimbursement as the funds are deducted directly from your health FSA account. It also significantly reduces manual paper claim submission and eliminates waiting for reimbursement checks.

How do I submit my documentation?

Choose the way you submit your documentation.

           Discovery Benefits
           PO Box 2926
           Fargo, ND 58108-2926 

 

What are the tax savings associated with an FSA?

An FSA is an account that allows you to contribute money on a pretax basis to be used for certain expenses related to health or dependent care. Because the money that goes into your FSA is deducted from your income on a pretax basis, it lowers the amount of income on which you are taxed.  The flexible spending plan is also designed to help you save tax dollars when you pay for IRS-eligible expenses. 

What are the rules regarding dependent care expenses?

In general, the following rules apply to dependent care expenses:

  • The expenses must be employment-related expenses for the care of a dependent of the employee who is under age 13 and entitled to a dependent deduction under Internal Revenue Service Code Section 151(e) or a dependent that is physically or mentally incapable of caring for himself or herself.
  • The total amount claimed under the plan for any coverage period must not exceed the lesser of your earned income for the plan year or the earned income of your spouse. If your spouse is either a full-time student or is capable of taking care of him or herself, then he or she is deemed to have monthly earnings of $200 if there is one (1) child or dependent, and $400 if there are two (s) or more.
  • No payment may be made under the plan if the service provider is your dependent for federal income tax purposes or if your child or stepchild who is under age 19.
  • If the services are provided by a dependent care center, the center must comply with all state and local laws and must provide care for more than six (6) individuals who are not a resident of the facility.
  • The total amount reimbursed cannot exceed the actual paid into the account.
  • Medical & Dependent Care Expenses Reimbursement Form (PDF)
  • Recurring Dependent Care Expenses (PDF)

 

Other Points to Remember

  • In order to be reimbursed from your account, the expenses you claim must be eligible under IRS regulations—you are responsible for keeping receipts in case you are audited or asked to provide substantiaion documentation.
  • Butler does not have a grace period. All expenses must be incurred between January 1 and December 31 of the plan year. However, claims for expenses incurred may be submitted up until March 31 the following year.  
  • Unused 2016 dependent flexible spending contributions are forfeited per IRS regulations. They cannot be "rolled over" into the next plan year.
  • You do not have to be enrolled in a medical, dental or vision plan to participate.
  • Contributions must be elected annually, on a calendar year basis. Annual elections cannot be changed during the year unless you experience a qualifying event as defined by the IRS.
  • We have two flexible spending accounts, Medical and Dependent Care. You may elect to participate in either or both.
  • The maximum amount is $2,600.