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Save money on your taxes with an FSA
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A flexible spending account (FSA) is a tax-advantaged savings account set up through a person's employer. You must set it up during annual enrollment each year. 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.)

TI offers three types of FSAs:

  • Health Care FSA for qualified health care expenses, for those who don't use the HDHP-HSA.
  • Dental/Vision FSA for those who take advantage of the HDHP-HSA
  • Dependent Daycare FSA for daycare expenses if you and your spouse are both employed
For 2016, the annual amount that can be contributed is capped at $2,550 for a Health Care FSA or a Dental/Vision FSA. The annual contribution maximum for a Dependent Daycare FSA remains at $5,000.

Plan highlights
Here are a few highlights of the plans:
  • Contributions are made through payroll deductions.
  • Health Care FSA claims are submitted automatically by Blue Cross Blue Shield PPO (for medical care), Caremark (for prescription drugs) and MetLife (for dental care). If you have a Dental/Vision FSA, MetLife will also file dental claims automatically. Claims for expenses from other carriers are submitted manually.
  • You will need to file claims manually for the Vision plan and the Dependent Daycare Spending Account.
  • TI's FSA administrator is WageWorks.
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, 2016, 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 2016 during annual enrollment, Nov. 3-17, 2015.
  • All claims must be submitted to WageWorks 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 2016 Health and Insurance Benefits Guide, which you can download from the left navigation column of this website.
  
Is an FSA for you?
•   Do a "what if": During enrollment, the FSA Calculator tool on the Fidelity NetBenefits® website can help you estimate your expenses and tax savings. When you enroll, look for the "FSA Calculator" link at the top of the flexible spending account pages.
•   Review eligible expenses
   
•   Dependent daycare FSA expenses list
•   Health care expenses list (TI's dental/vision FSA is a "limited purpose" FSA)
•   See how it works: Click here and then click "See how it works" for a brief informational video.

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.

Good facts to know
Contribution limits
IRS regulations cap the amount you can contribute annually to a flexible spending account:
•   $2,550 for Health Care Spending Account or a Dental & Vision Spending Account
•   $5,000 for a Dependent Daycare Spending Account
Restrictions on OTC expenses
The IRS requires a physician's prescription for over-the-counter (OTC) drugs to be reimbursable from a Health Care Spending Account or a Dental & Vision Spending Account, with the exception of:
•   Insulin
•   Supplies/equipment, such as for first-aid, hearing aids, foot therapy and diabetes management
WageWorks provides a list of qualified expenses.

 

 
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