Cut your tax bill with an FSA  
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An FSA is a tax-advantaged savings account set up through a person’s employer. At TI, you set it up during annual enrollment. You elect how much money you want to go toward an FSA based on how much you think you’ll spend during the year on health care and/or dependent daycare. The money transferred into an FSA is not subject to payroll taxes, so that can result in significant annual savings. (See the example.)

In 2011, TI will offer three types of FSAs:

  • Health Care Spending Account for qualified health care expenses
  • The new Dental and Vision Spending Account for those who take advantage of the new high-deductible health plan and health savings account option
  • Dependent Daycare Spending Account for daycare expenses if you and your spouse are both employed
The amount that can be contributed into each account is capped at $5,000 for 2011.

Plan highlights
Here are a few highlights of the plans:
  • Contributions are made through payroll deductions.
  • Health Care Spending Account claims are submitted automatically by Blue Cross Blue Shield PPO (for medical care), Caremark (for prescription drugs) and MetLife (for dental care). You will need to file claims for reimbursement under the Dental & Vision Spending Account and the Dependent Daycare Spending Account.
  • Claims for expenses from other carriers are submitted manually. TI’s FSA administrator, Ceridian, has made manual claims submission easier with a Web-based tool.
Important points to know
When managed properly, FSAs are a great way to exert more control over your before-tax dollars. However, keep the following in mind when considering your participation:
  • Your contributions do not roll over from one year to the next, so funds not used by Dec. 31, 2011, will be lost. This makes it very important to estimate carefully how much money you want to contribute. No refunds are allowed.
  • Money cannot be transferred between the different FSAs.
  • Once your election is complete, you may not change your election amounts unless you have an appropriate qualified status change (such as a birth, marriage or divorce) during the plan year.
  • Enrollment doesn’t automatically carry over from one year to the next. Current participants must re-enroll for 2011.
  • To participate in 2011, you must enroll during annual enrollment, Nov. 2-16, 2010.
  • All claims must be mailed and postmarked or faxed to Ceridian no later than three months after the end of the plan year (March 31) in which the expenses were incurred.
For more information on FSAs, including limitations and exclusions, refer to the 2011 Health and Insurance Benefits Guide, which you can download from the left navigation bar of this website.

 

New for 2011:
Restrictions on OTC expenses
As a part of health care reform, restrictions were placed on how FSA funds can be spent for over-the-counter (OTC) drug expenses. OTC drugs purchased on or after Jan. 1, 2011, require a physician’s prescription to be reimbursable from your Health Care Spending Account. However, insulin remains eligible without a prescription, as well as OTC supplies and equipment, including first-aid kits, hearing aid supplies, foot therapy supplies and diabetic management supplies. For your convenience, Ceridian provides a list of eligible expenses at ceridian-benefits.com, under Health Care Reform Information.


FSA example
Salary $45,000 a year, setting aside $3,500
  With FSA Without FSA
Income $45,000 $45,000
FSA 3,500 0
Taxable earnings 41,500 45,000
Taxes paid (@28%) 11,620 12,600
Potential savings: $980 $0
Your actual savings will depend upon your income, payroll deductions and tax rate.


Is an FSA for you?
Do a “what if”: During Oct. 21 to Nov. 16, the FSA Calculator tool on the Fidelity NetBenefits® website can help you estimate your expenses and tax savings. Go to the Health Management Center, then look for the calculator on the Cost Compare tool.

Review eligible expenses: Click here for a sampling of qualified health expenses.

View a website tutorial: Check out the new features of the Ceridian website in this online tutorial.

View an FSA tutorial: For a general review of how an FSA works, check www.whatisfsa.com.

 

 

 

 

 
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  Web page revisions made December 15, 2010
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