Flexible Spending Accounts (FSAs)

Your contribution is deducted from your paycheck before tax and put into the FSA. When you incur an eligible expense, you use the funds in your account to pay for it. Each account reduces your taxable income.

Health Care FSA

Covers most medical, dental and vision care expenses that aren’t covered by your health plan — copayments, coinsurance, deductibles, eyeglasses and contacts, orthodontia and prescriptions. The full list is in IRS Publication 502.

• Maximum contribution: $3,400 per year
• Funds are deducted throughout the year, but all funds are available on January 1
• You can’t enroll if you’re enrolled in the BCBSIL HDHP Plan

Dependent Care FSA

Covers dependent care expenses including day care and after-school programs for children under age 13, or elder care programs, so you can work or attend school full-time. The full list is in IRS Publication 503.

• Maximum contribution: $7,500 per year, or $3,750 if you’re married and filing separate tax returns

• Your elections are effective from January 1 through December 31
• Services must be incurred by December 31 each year
• Claims for reimbursement must be submitted by March 31 of the following year
• The Health Care FSA allows you to carry over $680 in unused funds to the following plan year
• Plan your contributions carefully. Any unused money left in your account is forfeited — the “use it or lose it” rule, governed by IRS regulations
• FSA elections don’t automatically continue from year to year; you must actively enroll each year
• You can only change your contribution amount if you have a qualified status change
• The FSA plans aren’t interchangeable. You must enroll in each separately, and funds are non-transferable