Careful Planning is required before enrolling in the Health Care Flexible Spending Account

Flexible Spending Accounts provide you with the opportunity to pay for eligible out-of-pocket expenses with pretax dollars. Annual elections are deducted from your salary each pay period before federal, state and FICA taxes are withheld.  This may reduce the amount of income tax you pay.

The Health Care Flexible Spending Account  allows you to elect an annual election amount through pretax payroll deductions to pay for eligible nonreimbursed medical, dental and vision expenses.

 
The Health Care Flexible Spending Account is administered by United Healthcare. You may elect to participate in this option independent of any other benefit elections you make during your enrollment period. Both are governed by IRS forfeiture rules, which you should know about before deciding to enroll.

"Use It or Lose It,” Rule

Important Note Regarding Forfeiting of Unused Funds for Health Care Flexible Spending Account

You will have until September 30th of the following plan year to submit claims for eligible expenses incurred from your coverage effective date through your coverage end date. If you have funds remaining in your account after this point, the funds will be forfeited, as required by IRS regulations. Due to the risk that your funds might be forfeited, it is very important that you accurately estimate your eligible non-reimbursed health care expenses and/or eligible dependent care expenses for the year prior to enrolling. It’s always safer to underestimate the total amount rather than lose money later because you didn’t spend everything you thought you would.

The Health Care Flexible Spending Account allows you to pay for eligible non-reimbursed health care expenses for you and/or your IRS qualified dependents with pretax dollars, which may result both in lower taxes and more spendable income. Health Care FSA is an optional benefit available to you no matter which medical or dental plan you choose.

Note:  Because of the tax advantage of this plan, the IRS applies strict rules and limitations. Be sure you read and understand this section before participating in the Health Care Flexible Spending Account.

Annual Election 

 
You can allocate an annual election amount from $100 to a maximum of $3,000 per calendar year, based on your estimate of eligible non-reimbursed health care expenses (including eligible expenses for qualified IRS dependents) for the upcoming year. Your annual election is divided by the total number of remaining pay periods in the year to determine your per paycheck deduction and is taken out on a pretax basis.

Generally, once you enroll in Health Care FSA, no changes to your annual election amount are permitted. However, federal law allows you to make election changes at other times during the plan year in certain limited situations. If you experience a change in your work or family circumstances, commonly referred to as a Family Status Change, you may be able to make certain changes to your Health Care FSA that are consistent with the change–in-status event. Your coverage effective date will be the date you make your election using the Benefits Election.

Note: You must re-enroll in Health Care FSA each year during Open Enrollment. If you do not re-enroll, your participation will cease. Thus, each year when you re-enroll you may change your designated annual election amount.

If you have any questions on Flexible Spending Accounts, please visit myuhc.com or contact the Benefits Department at (800) 378-8463.