Flexible Spending Accounts - Innovative Health Services

Pilot A Flexible Spending Plan is an employer-sponsored benefit plan. When you enroll in a Flexible Spending Plan, you can set aside a portion of your salary, on a tax-free basis, to use to pay for certain Eligible Expenses. The money that you set aside through regular payroll deductions is not subject to Federal, state (most states) or social security taxes. There are two types of Flexible Spending Accounts (“FSA”): Healthcare and Dependent Care.

If your employer sponsors a Flexible Spending Plan, please see our FAQ section to learn more. Please remember, the information we provide is general. Consult your employer’s plan for a more specific description of the FSA plan. Before you enroll, read your enrollment material and the Plan Summary, and ask questions if you have a particular concern.

Frequently Asked Questions

#15 What is an Eligible Healthcare Expense?

#16 What expenses are not eligible for Healthcare FSA reimbursement?

#17 When can I change or stop my Healthcare FSA election mid-year?

#23 When can I change or stop my Dependent Care FSA election mid-year?

During the Plan Year you may only increase, decrease or stop your contribution if one of the following events occurs, and the change that you want to make is consistent with the event that has occurred. All changes must be approved by your plan administrator.

Your legal marital status changes through marriage, the death of your spouse, divorce, legal separation or legal annulment;
There is an event which causes you to gain or lose a dependent;
You or your spouse terminate or begin employment;
There is an increase or reduction in hours of employment (including a switch between part-time and full-time employment, a strike or lockout, or the beginning or ending of an unpaid leave of absence) by you or your spouse or other dependent;
You, your spouse or your dependent becomes eligible or loses eligibility for coverage under a plan offered by that person’s employer because of a change in employment status (for example, if your dependent switches from hourly to salaried employment and the dependent’s employer’s medical plan covers only salaried employees);
There is a change in location of the residence or worksite of you or your spouse
There is an event that changes the number of your dependents who are under the age of 13 or mentally or physically incapacitated; or
If you take leave under the Family and Medical Leave Act of 1993 (FMLA), you may make certain election changes that are permitted by the Employer in accordance with the FMLA.

Ordinarily, you may change the amount you contribute to a dependent care flexible spending account because of a significant increase or decrease in the cost of the dependent care service. For example, you may have low dependent care costs during the school year, but higher costs over the summer months. However, be aware that if the dependent care provider who is imposing the increased cost is a close relative of yours, you cannot change your election mid-year. For this purpose, a close relative includes your parent, grandparent, child, grandchild, brother, sister, niece, nephew, stepparent, stepchild, stepbrother, stepsister, son-in-law, daughter-in-law, mother-in-law, father-in-law, sister-in-law or brother-in-law.

#24 Can’t I take a tax credit when I file my tax form at the end of the year, instead of participating in a Dependent Care FSA?

ALWAYS DISCUSS THESE ISSUES WITH YOUR TAX ADVISOR. You can also review IRS publication 503 for more information.