FLEXIBLE SPENDING ACCOUNTS Open Enrollment. ENROLLMENT. Open Enrollment is usually held late October and includes the first week in November with an effective date of January 1, the following year.
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Tax elimination – not tax deferral
Employees designate the amount to be deducted from their pay to cover out-of-pocket medical expenses for self and dependents.
$3,500 annual maximum
Example WITHOUT a Medical Reimbursement Account: Married, claiming 2 exemptions & who incurs $2000 of annual medical expenses not covered on health insurance
Gross Bi-weekly Salary $1,342.00
Bi-weekly contribution (0)
Taxable Income $1,274.90
Total Tax Withheld $240.30
Bi-weekly Tax Savings (0)
Annual Tax Savings (0)
Employees designate amount to be deducted from pay to cover dependent care expenses
$5,000 annual maximum per family
A dependent is defined as an individual under age 13 or a spouse or other individual who is physically or mentally unable to take care of themselves and who qualifies as a dependent for income tax purposes.
Expenses & Enrolls in Plan
HOW IT WORKS
Files Claim for
Funds not spent through reimbursement accounts are forfeited and used to fund plan administration.