Flexible Spending AccountWhat is a Flexible Spending Account (FSA)?FSAs are benefit plans that allow you to contribute a certain amount of your gross income to adesignated account or accounts before taxes are calculated, thereby reducing the amount you pay inFederal, Social Security, and, in many locations, State, taxes. Depending on your tax bracket youmay save between 25% and 40% of every dollar you contribute to an FSA. Funds contributed toFSAs are then used to pay for qualifying expenses. Three types of FSAs are available: StandardHealth Care, Limited Purpose Health Care, and Dependent Care.Standard Healthcare Flexible Spending Account (HCFSA)A Standard Healthcare FSA is for employees who are not enrolled in any high deductible healthplan (not in VELCO’s plan or another HDP). Funds in the HCFSA can be used for medical, dental,or vision expenses not paid for by an insurance plan.Limited-Purpose Flexible Spending Account (LPFSA)A Limited Purpose Flexible Spending Account (LPFSA) is available only for employees who areenrolled in a high deductible health plan, such as VELCO’s HDP. LPFSAs may only be used fordental and vision expenses. Generally speaking, if you elect the HDP and you want to save on apre-tax basis for healthcare expenses (medical, dental or vision) you should maximize yourcontribution to the HSA rather than contributing to an LPFSA. That said, there are a couple ofsituations where you may want to consider having an LPFSA with your HPD. If you know you aregoing to have a high-dollar dental or vision expense at the beginning of the year you could use theLPFSA as a cash flow tool since the full annual election in an FSA is available on January 1, asopposed to an HSA in which funding is only available as contributions are made. Also, if youknow that you will have high dollar expenses that will exceed the HSA contribution cap and someof those expenses will be dental or vision, it may be advantageous to have both an HSA and anLPFSA.HCFSA and LPFSA Rollover FeatureYou can carry over a limited amount of unused money in your HCFSA or LPFSA. For 2024, thecarryover limit is $640. Any amounts over $640 at the end of the plan year will be forfeited, perIRS regulations.Dependent Care Flexible Spending AccountDependent Care FSAs allow you to contribute pre-tax dollars to pay for qualified dependent careexpenses. This account can be used to pay for daycare for your children who are under the age of13 or for the care of an older child, a spouse, or relative who is physically or mentally incapable ofself-care and lives in your home. The care must be to allow you to work, that is - care for yourdependents while you are working. There is no rollover option for the Dependent Care FSA – perIRS regulations funds that are not used prior to the end of the year will be forfeited.Where will my FSA be administered?VELCO has contracted with EBPA as the administrator or our FSA plans.
It seems that your browser's pop-up blocker has prevented us from opening a new window/tab. Please click the button below to open the link manually.
