What is a FSA?

A Flexible Spending Account (FSA) is an employer-sponsored benefit account that allows employees (participants) to set aside pre-tax funds to help pay for eligible healthcare expenses. An FSA is a great spending vehicle designed to help participants pay for healthcare costs not covered by their health plan.

Why would an employer offer an FSA?

Simply put, perks and savings for the employer and participants! Employers benefit from lower reported wages (FICA tax savings), enhanced overall benefits package, and improved employee engagement and satisfaction. Employees benefit from increased take-home pay (lower taxable income) and savings on qualified healthcare expenses. It’s truly a win-win benefit!

How it Works

  • Participants can make an annual election up to the employer plan sponsor's allowed maximum.
  • The annual election is deducted evenly by the employer from the participant’s paychecks on a tax free basis.
  • The FULL amount of the annual election is available on day 1 of the plan year! Meaning the participant does not have to wait for the funds to accumulate.
  • Eligible healthcare expenses can be reimbursed by using the Benefits MasterCard or by check or direct deposit when expenses are paid for out-of-pocket.

Why Participate?

FSAs save you money! The contributions you make to an FSA are deducted from your pay check on a pre-tax basis – before federal income, social security, and most state taxes. The end results of your FSA contributions is a lower taxable income, and a tax advantaged vehicle to pay for out-of-pocket healthcare expenses.

There is really no reason to forgo participating in an FSA. Everyone has some type of out-of-pocket healthcare expenditure—thus, an opportunity to save! FSAs help you:

  • Reduce taxable income – Contributions lower your reported annual income, resulting in lower taxable wages.
  • Save on healthcare expenses – Using pre-tax funds to pay out of pocket expenses can save you hundreds!
  • Offset rising healthcare costs and individual financial responsibility.

Federal tax rate

Annual FSA contribution

Your estimated annual tax savings*

15%

$1,500

$340

15%

$2,600

$579

25%

$1,500

$490

25%

$2,600

$833

33%

$1,500

$610

33%

$2,600

$1,036

What’s Covered?

The IRS determines expenses eligible for reimbursement. For a printer friendly list of frequently purchased eligible products and services visit here.

Examples of common eligible expenses:

  • Acne Treatments**
  • Allergy Medicine **
  • Antacids**
  • Bandages
  • Chiropractic Care
  • Cold Medicine**
  • Condoms
  • Contact Lenses & Cleaners
  • Copays, Co-Insurance, & Deductibles
  • Dental Care (non-cosmetic)
  • Diabetic Supplies
  • Eyeglasses
  • First Aid Kits
  • Hearing Aids
  • Laser Eye Surgery
  • Orthodontia
  • Pain Relievers **
  • Pregnancy Tests
  • Prescription Drugs
  • Smoking Cessation Programs**
  • Sunscreen

** Over-the-Counter (OTC) drugs and medicines (except insulin) are only eligible for reimbursement when prescribed by a physician.

Who’s Covered?

An FSA covers eligible expenses for you, your spouse, your children (regardless of if you claim them on your tax return) and any other qualified dependents you claim on your tax return. Note: Children are no longer eligible to be a part of your FSA plan in the year they turn 27.

Keep Your Receipts

Whether you are using your benefits debit card to pay for a qualified expense or will be requesting reimbursement for an out of pocket expense, you should keep your receipts or Explanation of Benefits. The IRS requires it and we may request it to verify the eligibility of the expense. The IRS requires appropriate documentation for all reimbursements which must include the following:

  • Patient's Name: The name of the person who received the service or for whom the item was purchased. For retail store purchases, this information may be excluded
  • Provider's Name: The provider that delivered the service or where the item was purchased
  • Date of Service: The date when the service was provided, or the item was purchased
  • Type of Service: A description of the service provided, or the item purchased.
  • Cost: The amount owed, paid, or portion not reimbursed through your insurance carrier.

Please note: credit card receipts do not typically include the above requirements and will not meet the criteria to verify the eligibility of the expense

Managing My Account

We believe managing your FSA should be easy and convenient. Proficient Benefit Solutions offers a variety of ways to manage your account, access your funds, and receive communications.

Benefits MasterCard: Avoid out-of-pocket expenses with the Benefits MasterCard. Visit the Participant Ppage to find out more!

Proficient Connect: Participants enjoy secure access to their accounts through the Proficient Connect online portal and mobile App. View account balances, submit claims, add receipts, and more from any device! visit the Participant page to find out more.

Direct Deposit Reimbursement: Participants can take the hassle out of check deposit by electing to receive reimbursements by Direct Deposit. Visit the Participant page to find out more.

Communication Options: Participants can elect to receive account balances and important plan reminders through email, text, or both! Visit the Participant page to find out more.

 

Forms & Documents

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