Got Questions About Healthcare FSA? We Have Your Answers . . . and More

Think of a healthcare flexible spending account as a “piggy bank” of tax-free money on a healthcare debit card that you use to pay certain medical expenses.

With open enrollment for benefits in early November, here are common questions and answers about the Healthcare Flexible Spending Account:

Q: Who can enroll in the FSA and when?

A: Regular part-time and full-time associates can enroll or change their choices:

During open enrollment, with benefits starting Jan. 1.

Within 31 days of certain life events, such as marriage or the birth of a child.

You must re-enroll each year.   

Q: How does a healthcare FSA change the way I pay medical bills?

A: Each year, you expect to pay for prescriptions or doctor and hospital visits, but out of what paychecks? Just hope that several healthcare bills don’t hit at once.

However, an FSA allows you to spread out the costs over the year. You contribute an amount of your pay each pay period and start the year with a “piggy bank” of tax-free money on a healthcare debit card. You can use the card to pay for certain healthcare expenses.

Q: If I enroll, where will I see the benefits?

A: In addition to the debit card, your FSA contributions reduce your salary’s taxable portion. For every $100 you contribute to your the FSA, you reduce taxes by about $20.

Your take-home pay will go down, but by nowhere near what you’re putting into your FSA.

Q: Tax breaks from the IRS? Okay, so what’s the catch?

A: One catch is your FSA covers only eligible medical expenses, such as:

• Copays for medical and dental procedures
• Prescription drug expenses
• Some over-the-counter items

You can’t have coverage or reimbursement for those expenses from any insurance plan.

You must spend all the debit card money by year’s end or lose it, except for up to $500 that carries over to the next year.

Q: Must I send receipts?

A: For expenses like doctor’s office visits and prescription copays, you won’t. For others, you must send receipts to prove the expenses were eligible.

Q. Where do I go for more information?

Go to Employee Self Service on the portal, click on “eBenefits,” see Health Care FSA brochure in Benefit Information Center. The link to an FSA savings calculator and video is in middle of the page.

PAYFLEX website: payflex.com/products-and-services/flexible-spending-account.

NAFHEALTHPLANS website: nafhealthplans.com/health-benefits/flexible-spending-account/payflex/.