Alachua County offers Flexible Spending Account (FSA) for work-related, dependent care and/or medical expenses, which are not reimbursed by insurance. The employee designates how much he or she wants to contribute to a Flexible Spending Account (FSA). That amount is automatically deducted from twenty-four of the employee's twenty-six pay periods and deposited to an account. The amount the employee elects to set aside is not subject to federal income tax or social security tax.
A new employee may elect to participate when enrolling for benefits and will be effective the first of the month following one month of employment or any active employee may elect to participate during open enrollment in July, for an effective date of October 1.
How does the FSA work?
When the employee incurs an eligible expense, a request for reimbursement is submitted along with original receipts or Explanation of Benefits (EOB) to the third party administrator, TASC. TASC either mails a reimbursement check directly to the employee's home, or deposits the amount into the employee's bank account. There is also a flex convenience card that a member can use to pay for expenses. Receipts must be kept in case they are requested by TASC for verification. The convenience card is set up to allow for the card to be used to pay for certain coded expenses, with a pre-determined limit. This will allow participants the benefit of using the medical spending without having to pay the provider and then file for reimbursement. Instead you will just use the convenience card and the money will be deducted from the amount you elected to set aside at the start of the plan year.
Alachua County's plan year runs from October 1 of each year until September 30 of the following year. A new employee's plan year runs from their effective date of coverage until September 30. Expenses must be incurred during this time-frame in order to be eligible for reimbursement. The employee has until December 31 to file for reimbursement. Flexible spending accounts are governed by Section 125 of the Internal Revenue Code and any funds set aside for a plan year must be used during that plan year.
The IRS now allows for $500 of unused funds in your medical spending account to be carried over to the next plan year. The $500 carry over provision will replace the grace period starting with the October 1, 2014 – September 30, 2015 plan year. There will no longer be a grace period for either plan. The $500 carry over applies to the medical spending account only.
Employees must designate a new annual spending amount each year at open enrollment if they wish to continue to participate in the flexible spending program. If a new amount is not designated by the employee, the spending account does not continue into the next benefit year.
A qualified life-style event allows the employee to increase or decrease the designated annual amount or to enroll or discontinue.