Flexible Spending Accounts (FSAs) are tax-advantaged accounts that you can use to pay for eligible medical, prescription drug, dental, vision, hearing and dependent day care expenses. Your contributions to an FSA are deducted from your pay before taxes, which lowers your taxable income. You have two FSA options:
Dependent Care FSA.
If you enroll in an FSA during Open Enrollment, contributions will be taken from your paychecks starting with the first pay period in January.
If you enroll in an FSA when you first become eligible for coverage, you can start using benefits the first of the month after you enroll. Your contributions will be taken from your paycheck after your benefits start.
You can’t change your contribution amount outside of Open Enrollment unless you have a qualifying life event.
What are the Differences Between the FSAs?
Dependent Care FSA
All eligible employees (Employees in the Health Savings Plan CANNOT have a Healthcare FSA)
All eligible employees
2020 Contribution Maximum
$5,000 (married and filing jointly or single) $2.500 (married and filing separately)
Plan Year Rollover
Any amount from $50 to $500
Unused money is forfeited
Medical, prescription drug, dental, vision and hearing expenses, including copays, coinsurance and deductibles
Dependent care expenses for daycare or after-school care expenses for a child under age 13, an elderly person or a person with disabilities, as long as you claim them as a dependent on your tax return. Expenses must be incurred because you and your spouse are working or looking for work