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Dependent Care FSA FAQs

1. What is a Flexible Spending Account?

Flexible Spending Accounts offer you a tax-effective way to pay for health care expenses not normally reimbursed by a health care plan and dependent care expenses not normally reimbursed by a health care plan and dependent care expenses incurred so you can work. There are two types of accounts in which you can enroll:

  1. Health Care Flexible Spending Account, and
  2. Dependent Care Flexible Spending Account

Participating in the FSAs is entirely voluntary. If you choose to participate, you may have just one FSA or both. The FSAs are entirely separate accounts, and you cannot transfer money between them. In certain situations, different rules may apply. At the end of the year, any money left in either FSA is forfeited.

2. Who is eligible to participate in an FSA?

Regular, full-time employees regularly scheduled to work at least 30 hours a week are eligible to enroll in an FSA. Limited-term employees are not eligible.

3. When can I enroll in an FSA?

Eligible employees can enroll in an FSA within 31 days from the date they become eligible, which is usually their date of hire. The FSA is then effective immediately and participation continues until the end of the calendar year.

Eligible employees who want to participate in an FSA must enroll during Open Enrollment. Open Enrollment is usually mid-October through mid-November of each year. The effective date for the FSA is January 1 of the following year.

4. How does a Dependent Care FSA work?

The amount you have elected is deducted from your paycheck on a bi-weekly basis and set aside in your Dependent Care Account. You pay day care expenses as usual. Then you submit a request for reimbursement along with receipts to the FSA Administrator. The accompanying receipts must include the dates of service, and the provider's federal tax identification number. If approved, the FSA Administrator will then send you a check for the reimbursement.

5. How much can I contribute to my Dependent Care FSA?

For a Dependent Care FSA, you can contribute from $104 up to $5,000 annually.

6. Can I change the contribution amount at a later date?

No. You cannot change your FSA election unless you have a qualified status change as described on PDF Page 5 of the Summary Plan Description. If you have a qualified status change, then your new FSA election must be consistent with your qualified change in status.

7. What are eligible dependent care expenses?

Eligible expenses include many of the expenses you pay for the care of your eligible dependents while you work. You can use pre-tax dollars in an FSA to pay for day care services provided to your children under age 13, as well as an incapacitated parent or spouse. Eligible expenses include:

  • Licensed daycare center charges
  • Qualified day camp charges
  • Charges for services by maids/housekeepers for the part of their work that consists of taking care of dependents
  • Charges of a day care provider unless the person is:
    • Your or your spouse's dependent for federal income tax purposes; or
    • Your child or stepchild who is younger than age 19 at the end of the year

For additional information about dependent care expenses that are considered tax deductible by the IRS, and therefore are reimbursable through Dependent Care FSAs, see IRS Publication 503 which is available on www.irs.gov or you may request a copy directly from the IRS by calling 800.829.3676. Consult a tax professional for further information regarding your personal financial situation.

8. How do I request a reimbursement from my Dependent Care FSA?

Refer to the Summary Plan Description for instructions on requesting reimbursement from your FSAs.

9. What is the deadline for submitting requests for reimbursement?

You have until March 31 of the following year to file a request for reimbursement incurred during the plan year. For example, you have until March 31, 2007 to file a request for reimbursement for expenses incurred in 2006.

10. What happens to funds in my Dependent Care FSA that I don't use?

As required under IRS regulations, account balances that are not used for expenses during the plan year are forfeited to the plan. Forfeitures are used to offset the cost of plan administration.

11. Can I use the money in my Dependent Care FSA to help pay for medical expenses not covered by my insurance?

No. Contributions allocated to one benefit account can only be used to pay a claim from that benefit program. For example, your contributions to your Dependent Care FSA cannot be used to pay a medical care expense.