Flexible Spending Accounts
Flexible Spending Accounts (FSAs) let you pay for health care, your kids’ day care, or your parents’ elder care expenses on a before-tax basis. This saves you money on the things you’d be paying for anyway. FSAs are available to designated full-time employees working 30 or more hours a week.
BAYADA offers two FSAs:
- Health Care Flexible Spending Account. Use this account to pay for health care expenses for you and your covered dependents. You can contribute up to $2,600 each year to pay for things such as copayments for office visits and prescription drugs.
- Dependent Day Care Flexible Spending Account. Use this account to pay day care expenses for your children, or elder care expenses for parents, so that you and your spouse (if married) can work. You can contribute up to $5,000 each year. (Certain restrictions apply to highly compensated employees. You’ll be notified if you’re affected.)
You can participate in one or both FSAs.
How they work
You contribute money on a before-tax basis, or before taxes come out of your paycheck. When you have an eligible expense, you get reimbursed tax free.
You decide how much to contribute, but plan carefully. FSAs have a “use it or lose it” rule. That means, you have to use the money in your account by the end of the plan year, or else it’s forfeited. However the IRS lets you carry over up to $500 in the Health Care FSA each year to pay for expenses the following year. Expenses must be submitted by September 30 each year.