The Mount offers an innovative way to save money: two separate tax-free accounts that reimburse you for either health care or dependent day care expenses not covered under your insurance plans.
You may establish two Flexible Spending Accounts. One for health care expenses and another for dependent day care expenses. You decide on the amount you want to put into the account(s) each pay period. That amount is then deposited to the appropriate FSA before federal, FICA and state taxes are deducted. When you have health or dependent day care expenses, you reimburse yourself for these out-of-pocket expenses, using these tax-free funds.
However, there is a caution. You need to plan carefully for the expenses you will actually have during the course of the year. Any money that you choose to have deposited in an FSA cannot be returned to you if you do not spend it by the end of the year. If you don't use it during the course of the year, you lose it. This is a requirement of the federal government. Allocations toward FSA's are made for a calendar year - from January 1st through December 31st. During open enrollment each year, you will have the opportunity to re-enroll for the following calendar year and determine your expected expenses for that year.
Changing your Election
Your election may not be changed during the calendar year unless one of the following occurs:
- A change in your marital status
- The addition or loss of a dependent
- Termination of your spouse's employment or loss of eligibility for coverage by your spouse under a group medical plan sponsored by your spouse's employer
- A change in your eligible class
You must make the change within 30 days after one of these events occurs. It will become effective on the day you submit the new election form and will remain in effect for the balance of the year.
Health Care FLEXIBLE SPENDING Account (fsa)
You may use this Health FSA for health care expenses such as deductibles, coinsurance/co-pays, non-covered health expenses, non-covered dental expenses, eye care expenses (such as contact lenses, eye exams and glasses), hearing expenses, and over-the-counter medications. All of these may be paid with before tax dollars and save you money.
Flexible Spending Account FAQ'sAny medical expense that is allowed as a deduction on your tax return is allowed as a reimbursable health care expense. Remember though, if you use your reimbursement account to pay for a health care expense, you may not also claim that same expense on your tax return.
The Health FSA may be used for your expenses and for your dependent's expenses. You may deposit up to $2,500 annually into the Health Care FSA. As you incur eligible expenses during the year, you can pay the expenses using an FSA Visa debit card or you may pay out of your pocket, and then submit a claim for reimbursement from the account. Participants may rollover up to $550 of unused Health FSA funds into the next calendar year.
Dependent DAY CARE FLEXIBLE SPENDING Account (FSA)
Currently, childcare costs are paid after you receive your paycheck. Now you may reimburse yourself through the Dependent Day Care FSA for the cost of dependent care while you and your spouse are at work. You may deposit up to $5,000 a year into this account ($2,500 if married and filing a separate income tax return).
In general, any dependent care expenses you are allowed to report on your individual Internal Revenue tax return are eligible Dependent Day Care FSA expenses. As you incur eligible expenses during the year, you pay the expenses out of your pocket, and then submit a claim for reimbursement from the account.
Download the Flexible Spending Accounts Benefit Summary