Flexible Spending Accounts
Future Planning Associates, Inc.
600 Blair Park Road, P.O. Box 905
Williston, VT 05495-0905
Flex Account Terms and Conditions
Flex Account Qualifying Expenses
Healthcare Expense Claim Form
Dependent Care Expense Form
A Flexible Spending Account allows you to use tax-free dollars to pay for certain kinds of benefits and expenses which you would normally pay for with out-of-pocket, taxable dollars. The money you set aside is placed in a Flexible Spending Account, designed to shelter some of your earnings in order to pay for certain medical and day care expenses tax-free. Please keep in mind that if you receive a reimbursement for an expense under the Plan, you cannot claim a federal income tax credit or deduction on your return.
As well as having the option to have a reimbursement account, your per-paycheck contribution toward the cost of health, dental and life insurance will automatically be made pre-tax.
Before the start of each Plan Year you have the option to elect to have a fixed dollar amount taken from your paycheck on a pre-tax basis. To be eligible for participation, you must work a minimum of 32 hours per week for a minimum of 40 weeks per year. You may elect an amount of up to a maximum of $2,500 per plan year for eligible healthcare expenses, and up to a maximum of $5,000 per family (or $2,500 per individual if you and your spouse are participating) for eligible dependent care expenses. Your dependent care account may be used for child care, elder care, or the care of a disabled spouse. For a list of eligible expenses, please see Flex Account Qualifying Expenses.
The money you deposit in your Flexible Spending Account is not taxed. That could mean a significant tax saving for you, reducing your costs for dependent care, dental, medical, or vision expenses. In the lowest tax bracket, for example, an estimated 25% of the deposited amount can be saved in taxes when you plan your account carefully. It is important to read the Flexible Spending Account Summary Plan Description before signing a salary reduction agreement. The booklet is provided to you at Orientation or if requested during Open Enrollment in November.
There are restrictions to consider when setting up your Flexible Spending Account. Federal requirements state that you cannot stop or change your election unless you experience a family status change, including marriage, divorce, death, adoption, termination of employment etc.
Another restriction for which you need to be aware: Any monies left in your reimbursement accounts as of December 31 of each Plan Year will be forfeited. It is a “use it or lose it” situation.
Also, keep in mind if you are considering an account for dependent care expenses, it may eliminate your ability to use the dependent care tax credit when you file your federal income tax return. In some cases, the tax credit could be more valuable than a Flex Account. Review this with your tax advisor before you enroll in a Flexible Spending Account.
If your employment terminates or your employment status changes and you no longer make contributions to your health care or dependent care reimbursement account, your account will be capped at the amount of your contributions and you will not be able to submit expenses which are incurred after your contributions cease. You do, however, have the option of continuing to make contributions to your account post-tax, if you choose to exercise COBRA rights as they apply to flexible spending accounts.
Important Note: Information regarding benefit enrollment, effective dates of coverage, and policy specifics are available at the Office of Human Resources. The College reserves the right to amend, change, or terminate any benefit plan at any time. The descriptions above are intended to provide a brief summary of the benefit plans. If there is any discrepancy between the language in this summary and the actual policy or contract held in the Office of Human Resources, the actual policy or contract governs.
This information last updated November 6, 2008