It’s that time again – when the FSA enrollment period rolls around and you should start thinking about your eligible expenses.
Sponsored by the MTA, the FSA is a pre-tax benefit plan that enables workers to save federal, state and social security (FICA) taxes on money used to pay for medical and certain other expenses and dependent or elder care. The bottom line is that by using an FSA, you get your tax break upfront, parceled out over the year in the form of lower tax withholdings on each paycheck.
What: An FSA allows you to set aside funds for medical and dependent care expenses on a pre-tax basis, thereby reducing your taxable income and increasing your take-home pay. The MTA sets up its account through the P&A Group and you can begin spending your entire year’s allocation on January 1, 2017. The MTA recovers any money you spend through 24 payroll deductions during the calendar year. There are no deductions withholdings for the first and last paychecks in the calendar year.
When: Open enrollment began on November 1 and continues through December 15. Now is a good time for you to review the FSA guidelines (click here for a copy of the new FSA Enrollment Guide) and think about how much money you want to set aside for your additional expenses. You can set up either or both types of accounts, depending on your needs. The maximum is now $2,600 for Medical Expense Reimbursement FSAs and $5,000 for a Dependent Care Assistance account. The $2,600 maximum for Medical Expense Reimbursement is new for 2017.
What’s covered? Here are some typical expenses for which you can use your Medical Expense Reimbursement account: Co-payments for physicians’ visits, prescription drugs, glasses, contact lenses, and dental expenses that aren’t covered by your medical or dental insurance. To see what other expenses are eligible, check the list on the P&A website or call 800-688-2611 to ask a P&A customer service representative.
You can also set up a Dependent Care FSA to set aside money to pay for qualified child care and babysitting (when you’re at work), or for dependent care – such as for your parents or other eligible dependents in your family.
How do I use it? To make accessing your accounts even easier, P&A Group will provide you with a special MasterCard that works like a debit card and which you can use to pay for qualified expenses. If you have been participating in the FSA for the last three years, your card will expire and you’ll get a new card in the mail from the P&A Group.
A very important caveat: Because of IRS Regulations, FSA accounts are use-it-or lose-it, which means that any money left in your account after June 30, 2018 will be forfeited. Expenses incurred from January 1, 2017 through March 15, 2018 are eligible and you have until June 30, 2018 to submit them to the P&A. It doesn’t take a lot of bookkeeping to ensure that you don’t forfeit your money.
How can I track my usage? You can access your account balance at any time on the P&A website. You can also provide them with your email address and you’ll get an email every time you use your card or submit a claim. The email will also show your current account balance.
Remember: Open enrollment for FSAs for 2017 began on November 1 and continues through midnight, December 15, 2016. If you are currently enrolled in this benefit program and want to continue, you must re-enroll. You can complete your enrollment online at www.padmin.com or call the P&A Group at 1-800-688-2611.