A Flexible Spending Account (FSA) allows you to direct a part of your pay on a pre-tax basis, into a special account that can be used throughout the year to reimburse yourself for certain out-of-pocket medical expenses and/or dependent day care expenses. Because your money goes into your reimbursement account before federal and state (where applicable) income taxes are withheld, you pay less in taxes, and ultimately have more disposable income. There are two types of Flexible Spending Accounts: the Medical Reimbursement Account and the Dependent Day Care Account.
With an FSA, the IRS requires a person to "use-it-or-lose-it" within the plan year (and Grace Period if applicable). "Use it or Lose it" means if you do not spend all the money you have elected, it will be forfeited, because under the IRS law it cannot be rolled over or refunded to you. Any money that you elect to set aside in an FSA for a given plan year may only be used for eligible expenses you incur for services received during that plan year (or Grace Period if applicable). It is very important that you plan carefully when deciding how much to allot for your FSA.
Medical Reimbursement Account
Your Medical Reimbursement Account may be used to reimburse yourself for eligible medical expenses incurred for yourself, your spouse, your eligible dependents, and/or your adult children who have not reached age 27 before the end of the calendar year. You must be able to claim your dependents on your taxes for them to be eligible to use your FSA funds.
Eligible medical expenses include deductibles and coinsurance amounts under a group health plan, charges that are in excess of the amount reimbursed under a group health plan, and charges that are not covered under a group health plan such as certain corrective surgeries, vision care, dental care, hearing aids and more (cosmetic surgery is an ineligble expense). For a list of eligible expense visit FSA Eligible Expenses
Note: If you or your spouse participate in a qualified High Deductible Health Plan and contribute to a Health Savings Account, you are not eligible to participate in a medical FSA at GPISD.
Dependent Care Reimbursement Account
A Dependent Care Reimbursement Account allows you to pay for the care of a child(ren) under age 13, handicapped dependents regardless of age, and elderly parents or for other “qualifying dependents” with “pre-tax” dollars. The maximum contributions are established by the IRS each calendar year.
You must have made payments for dependent day care to someone you could not claim as a dependent, and if the person you made payments to was your child, he or she must have been age 19 or over by the end of the tax year.
First Financial Administrator (FFA) Benefits Card
The FFGA FSA benefit card is available to those enrolled in the Medical Reimbursment FSA and Dependent Care FSA. This card may be used in lieu of cash for qualifed expenses only. It is a signature debit card, and does not require a pin for use. Cards are good for three years from the issue date as long as you participate each consecutive plan year. Additional cards may be issued to a spouse and dependent children (age 18 to 26) for no additional fee.
The FSA Plan Year
The Plan Year for a Flexible Spending Account is September 1st through August 31st.
NOTE: Galena Park ISD offers an FSA Grace Period. This means you have an additional 2 1/2 months from the end of the plan year to spend the funds in your FSA for qualified expenses that occur up to the last date of the Grace Period. The Grace Period date will be published on the Employee Benefits webpage each October.
It is extremely important that you maintain Itemized Receipts for all of your services paid for through your FSA.
Frequently Asked Question About Medical Flexible Spending Accounts
Does my FSA money roll over year to year?
No, the money you save in your FSA must be used each plan year, that means you must use your money between September 1st through August 31st. Money you do not use is lost and cannot be returned to you according to IRS law.
Can I use my FSA money for dental and vision expenses?
Yes, you can use your FSA money for any qualified medical expense. If you are not sure if an expense is qualified, refer to the list on the employee benefits web page, or call the number on the back of your FSA card for guidance.
Do I need to keep my receipts when I use my FSA card?
YES! Third party documentation is usually requested and many times is required to support the charges paid for with your Flex money. Therefore, always hold onto your receipts in case further documentation is requested. Your receipt must contain the following information:
- Date of service;
- Name and address of service provider or merchant;
- Description of the service or expense provided; and,
- Amount charged.
*Please note that non-itemized cash register tapes, credit card receipts, and cancelled checks are not adequate documentation.
How will I know if I need to submit a receipt to support my charge?
If a receipt is needed you will be notified by First Financial Group.
What if I don't submit my receipts?
You must provide the receipts within the time requested or the transaction will be deemed ineligible, and you will be required to refund the amount of the transaction to your account. If you fail to submit required receipts within 45 days, your FSA payment card will be deactivated. If you fail to reimburse the account, your employer may withhold the amount of the ineligible expense(s) from your pay or add it to your W-2. However, the IRS may require you to present receipts to verify your tax return. So hold onto these receipts.
Will the card know which expenses are eligible and which are not?
While the card can identify a healthcare or childcare location based on the Merchant Category Code, it cannot identify the items or services purchased. This is why in some instances you will be required to send in documentation to verify that the card was used to pay for an eligible expense. Always save your receipts!
What happens if I use the card for an ineligible expense?
If you use the card for an ineligible expense, you will be required to reimburse your account for that transaction.
Does Galena Park ISD allow a roll-over or a Grace Period for my FSA?
Yes, Galena Park ISD offers a Grace Period, we do not offer a rollover. A Grace Period means you have an additional 2 ½ months to use your FSA money after the end of the plan year on August 31st.