For Employees

11 Myths about the plan DISPELLED

    It will lower my tax refund in April
    I could lose money if I don't use it
    There is too much paperwork
    I'm close to retirement - I don't want to make my social security benefits any smaller
    I thought it was only for people with children
    I thought the plan was only for prescription drugs
    My spouse also has a plan at work
    I can't afford to have any more taken out of my paycheck
    It's too confusing and time consuming
    It will flag me for an IRS audit
    I can take a deduction for medical expenses on my Form 1040
FSA Eligible Expenses and Items

Frequently Asked Questions

What is a Flexible Benefit Plan?
A benefit provided by your employer that lets you set aside a certain amount of your paycheck into an account before paying income taxes. Then, during the year you can use funds in the account to pay for qualified expenses with untaxed dollars.
What expenses qualify for payment?
Most qualified expenses are for goods or services that you'll buy anyway. They include health care costs such as co-pays, doctors' fees, prescriptions; dental and eye care expenses; day care expenses for dependents so you can work; parking and transit costs in connection with your job; and even adoption expenses.
How do I pay for qualified expenses?
Your EMPOWER Flex benefits card is the most convenient way to pay. And what's best, you don't have to reach into your pocket to pay when you use the card to pay qualified expenses. By paying with the card, your purchase is deducted from the appropriate balance in your account(s). Certain payments will require further verification, so hold onto your receipts.
Do I need to file claim forms?
Not in most cases. You will, however, be asked to file a claim form when further information is needed to verify that a card transaction was for a qualified expense. Also, if a provider does not accept Visa, you'll need to file a claim for reimbursement. Filing claims is easy. Complete a claim form and attach a copy of the bill. Then, send it to your plan service provider. Within a short time, you'll receive your TAX-FREE reimbursement.
How does money get deposited into my accounts?
Estimate your expenses. Then set aside money, tax-free, through regular payroll deductions.
How do I know how much is available in my accounts?
Your balance and other details are always available online or by calling the Flex Hotline.
Must money be deposited in my account before I pay expenses or file a claim?
NO. The entire annual amount you elect for the Health Flexible Spending Account (FSA) is available on the first day and throughout the plan year. However, only amounts contributed to date are available for Dependent Care, Parking, Transit and Adoption expenses.
If I set aside part of my pay, won't I make less money?
NO. For every dollar you set aside to pay qualified expenses, you save social security tax (FICA), federal income tax, and (where applicable) state withholding. Your net take-home pay will increase by the tax you save. Plus, when you pay a qualified expense or receive a cash reimbursement, it's TAX FREE.
Can I change my contributions during the year?
NO. For the Health FSA and Dependent Care Benefit, you can change your election if you have a change in status or a change in your employment or the employment of your spouse or a dependent. The Parking and Transit plans allow you to change your election for any reason. Adoption Assistance elections may be changed when initiating or concluding an adoption attempt.
I already have health insurance. Why should I participate in the Health Care Account?
The Health FSA account is used to pay for expenses not covered by insurance. For example: co-pays, glasses, contacts, orthodontics and prescription drugs, just to name a few.
I don't use my employer's health insurance. Can I still save?
YES! You and your family can still set aside money (before taxes are taken out) to budget and pay for qualified expenses. Remember, a qualified expense paid from this plan cannot be eligible for reimbursement from another plan.
I take a dependent care credit on Form 1040. Will this Dependent Care Benefit save more?
The more you earn, the more you'll save. In addition, you'll also save FICA with a Dependent Care Benefit (DCB). So, why wait until April 15 to take the credit? Now, you can save taxes on every paycheck. Which is best for you?
Will the Adoption Assistance Plan save more than taking the Credit on my Form 1040?
If you expect to pay more than the annual limit in any one calendar year, you might want to take advantage of both. Take the tax credit on Form 1040 and be reimbursed for additional adoption expenses through this plan. Please note: Although you won't save FICA on contributions to the Adoption Assistance plan, you will save federal and state tax (where applicable). Consult your tax advisor for details.
What if I don't use all of the money in my accounts?
Generally, contributions that are not used during the plan year may not be paid to you in cash or used in a later year. However, for the parking or transit plan, your unused contributions will roll forward to the next year. Therefore, be sure to carefully budget and calculate your qualified expenses.
What happens to my accounts if I terminate employment?
You may request reimbursement for qualified expenses incurred prior to your termination. Check your Summary Plan Description for additional rights provided by your employer's plan.
Are there any negatives that I should know about?
Because you will not pay social security tax on the amount of gross pay you set aside to pay for qualified expenses, your social security benefits at retirement may be slightly reduced. However most tax advisors recommend taking advantage of current tax-savings opportunities like this.
What's the biggest benefit when I participate?
Your biggest advantage is saving withholding taxes. That's because you'll save $25 to $40 on every $100 you budget to pay for qualified expenses.
EMPOWER is a division of Family Health America, L.C.
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