Flexible Spending Accounts

Pre-Tax

Flexible Spending Accounts are the best way to save money on expenses you pay anyway. They allow you to set aside pre-tax income to use to pay for eligible health and day care expenses. Chard-Snyder manages UofL’s flexible spending accounts. Two separate accounts are available: health care or dependent care. You may enroll in either or both, or you may choose not to enroll at all.

Depending on your tax bracket, you can save 25% to 30% in taxes on every dollar you put into the accounts. For example, if you were to set aside $3,000 this year for health care expenses, you would save nearly $1,000 in taxes if you are in the 30% tax bracket. If you set aside $5,000 for child care or elder care expenses, you would save as much as $1,500.

Heads Up

• You must use your 2011 FSA funds for eligible expenses by March 15, 2012. You can file your 2011 expenses to be reimbursed through March 31, 2012. If there is any money left in your account after that, you will forfeit it.
• Starting January 1, 2013, Healthcare Flexible Spending Accounts will have an annual limit of $2,500. So, plan accordingly for 2012. If you are considering using your FSA for services such as braces, laser vision correction surgery, etc... don't miss out on maximizing your FSA contribution for 2012.
• Once you set up an FSA, you cannot change your contributions to it unless there is a qualifying event in your family’s status (marital status, birth or adoption of a child, change in day care expenses or provider, death of a family member) or in your or your spouse's employment status (changing from full-time to part-time).
• Do not destroy the Benny Card you received in 2011. It will be valid in 2012.
• If you are covered under a health savings account (HSA) elsewhere and are interested in a limited health FSA, please contact Benefits at 852-0040 for more information.
• PLEASE NOTE: It is standard for Chard Snyder to seek substantiation for a Benny Card transaction to ensure that a participant is compliant with the IRS regulations that govern flexible spending accounts.  When Chard Snyder sees the swipe of your Benny card at the point of service, they just see an amount, a transaction date and the provider's name. They do not see the type of service or the patient's name.  Some services that may be charged to the Benny card may not be allowable services (for example, cosmetic services).  They then ask the participant for an itemized statement of services.  You have 70 days to provide this supporting documentation to Chard Snyder.  They send 3 notice letters asking for the documentation and if they do not receive within 70 days, they will block the Benny card for use while they obtain the information. 

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Health Care Flexible Spending Account

The Internal Revenue Service allows you to set aside from $150 to $5,000 annually in a health care flexible spending account. You can use the money to pay for IRS-approved medical expenses not covered by the health, dental or vision plans, including:

• These expenses can be yours or those of any member of your family (IRS dependents).

Some expenses cannot be paid through a flexible spending account, including:

• Cosmetic surgery, maternity clothes, health club dues, funeral expenses and insurance plan premiums

Complete list is available here .

 Heads Up

• Keep your health-care-related receipts. Chard, Snyder & Associates may request that you send them as proof of your expenses to fulfill Internal Revenue Service requirements.
• You cannot take a tax deduction on your return for expenses paid from a flexible spending account.

Questions about current FSAs? Call Chard, Snyder & Associates at 1-800-982-7715, 8 a.m. - 7 p.m. (EST), Mon. - Fri.

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