Pay for Health and Dependent Care with Pre-tax Money
You can pay for eligible health care and dependent day care expenses with pre-tax money when you contribute to your FSA. When you enroll in the FSA, you choose an amount from each paycheck to contribute to your FSA. The money is deducted before taxes and when you use these funds for eligible expenses, you do so with pre-tax money and thus you save on taxes.
You must choose your amount carefully because you cannot change your FSA contribution outside of your initial new hire enrollment or Open Enrollment unless you experience a qualified life event and you report it through MyHR within 30 days.
Unlike the Health Reimbursement Account (HRA) and Health Savings Account (HSA), the balance of your FSA does not roll over to next year and you forfeit any unused balance in your account. Your contributions must be used in the current year and you must file your reimbursement requests in a timely manner. Additionally, you must actively enroll in the FSA each year. If you are enrolled this year, you will not automatically be enrolled for next year.
Health Care FSA
|Blue Plan (also eligible for an HRA)||Green or Orange Plans (also eligible for an HSA)||Waive Health Plan|
|Eligible Expenses||General Purpose FSA||Limited Purpose FSA||General Purpose FSA|
|Deductible and coinsurance||HRA will pay first, then you can submit your out-of-pocket expense to your FSA||No, cannot be reimbursed by FSA (HSA can reimburse these expenses)||Yes, deductible and coinsurance from another plan (such as a spouse’s/domestic partner’s plan) can be reimbursed by FSA|
|Prescription drugs and prescribed over-the-counter medications||HRA will pay first, then you can submit your out-of-pocket expense to your FSA||No, cannot be reimbursed by FSA (HSA can reimburse these expenses)||Yes, amounts not reimbursed under another plan can be reimbursed by FSA|
|Dental, LASIK surgery and vision hardware||Yes, can be reimbursed by FSA||Yes, can be reimbursed by FSA||Yes, amounts not reimbursed under another plan can be reimbursed by FSA|
|Non-tax-qualified dependents, which includes domestic partners and children of domestic partners||No, cannot be reimbursed by FSA||No, cannot be reimbursed by FSA||No, cannot be reimbursed by FSA|
As the table above shows, when you enroll in the Green or Orange Plan, the Health Care FSA is a Limited Purpose FSA and covers only eligible dental, LASIK surgery and vision hardware expenses. This is because the IRS has special rules that govern high-deductible health plans like our Green and Orange Plan options. The Health Care FSA 2022 maximum annual contribution is $2,750.
If you elect the Blue Plan and a Health Care FSA, your Health Care FSA will be a General Purpose FSA. The General Purpose FSA allows you to pay for eligible medical, prescription, dental and vision expenses that are not reimbursed from another source (e.g., a health or dental plan) on a pre-tax basis. Eligible health care expenses first will be paid automatically under the HRA. Eligible out-of-pocket health care expenses not paid by the HRA can be submitted to your FSA. It is important that you plan carefully because unused FSA balances are forfeited.
Dependent Day Care FSA
The Dependent Day Care FSA helps pay expenses for the care of your eligible dependents. Eligible dependents include your child(ren) under age 13, your spouse, or anyone else you claim as a tax dependent who requires special care. To qualify, the dependent care must allow for you to work and, if you're married, allow your spouse/domestic partner to work (or look for work) or go to school full time at least five months per year.
The Dependent Day Care FSA maximum annual contribution is $5,000 (including any pre-tax contributions your spouse makes to a Dependent Day Care FSA through his/her employer). If you are married and file separate tax returns, the maximum annual contribution is $2,500.
If your 2021 W-2 earnings with Assurant are expected to reach $130,000 or more, please be aware that your election may be reduced early next year due to IRS regulations. The regulations limit contributions from employees earning over a certain threshold to ensure that they do not receive a disproportionate tax benefit. Consult with a tax adviser for more information.