Business Services

Human Resources Employee Benefits

HEALTHCARE FLEXIBLE SPENDING ACCOUNT

Up to $2,750 per year maximum

This account enables you to be reimbursed for out of pocket eligible health care expenses incurred by you and your dependents that are not covered by medical, dental or vision plans. You must submit an itemized bill, fill out a form and then you’ll be reimbursed at least once a month (usually within two weeks) of submittal. Examples of eligible expenses include copays and deductibles for doctor visits, prescriptions, prescription eyeglasses and contacts, laser correction surgery, contact lens solution, dental care, hearing aids, laboratory fees and psychologist and chiropractic visits. If you are considering budgeting for an expensive procedure like LASIK, major dental work or orthodontia, it is recommended to have an evaluation and receive your cost estimates before you set the money aside. Common ineligible expenses include premiums for other health plans, cosmetic procedures, and fitness programs. Due to changes in federal law, over the counter medications will no longer be eligible expenses.

Below is an example for a single employee with zero exemptions earning $60,000 per year who saved approximately $419.50 in taxes by creating a $1,000 healthcare flexible spending account.

 

 

Employee Tax Savings Without FSA With FSA
     
Total Gross Annual Wages $60,000.00 $60,000.00
Health Care FSA Expenses --- $1,000.00
Dependent Care FSA Expenses --- ---
     Taxable Annual Wages $60,000.00 $59,000.00
     
Income Taxes    
Social Security & Medicare $4,590.00 $4,513.50
Federal Income Taxes $9,615.00 $9,365.00
Dependent Care Credit --- ---
Earned Income Credit    
State Income Taxes $3,224.83 $3,131.83
     Total Taxes $17,429.83 $17,010.33
     
Health Care Expenses $1,000.00 ---
Dependent Care Expenses --- ---
After Tax Income $41,570.17 $41,989.67
     Annual Tax Savings --- $419.50

 

General Information

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