Flexible Spending Accounts

Flexible Spending Accounts (FSAs)

FSAs are available to associates through convenient payroll deductions on a pre-tax basis to help cover the cost of eligible expenses (as defined by the IRS). There are several FSAs available. These accounts have been established to cover different needs, as follows:

• Health care spending account: Covers expenses not covered or partially covered by health, dental, prescription drug and vision programs such as co-pays and deductibles for you and your eligible dependents.
• Limited purpose spending account: This is a special health care spending account available only if you enroll in the high-deductible health plan (our Green plan). It follows the same rules as the health care FSA but is only for dental and vision expenses.
• Dependent care spending account: Covers expenses for day care or similar care to eligible dependents as defined by the IRS.
• Mass transit spending account: Covers expenses for public transportation related to the commute to and from work.
• Parking spending account: Covers expenses for public parking related to the commute to and from work.

Associates may elect to participate in one or more of these accounts in any combination. Health care, limited purpose and dependent care spending account elections are based on an ANNUAL election amount; you will need to calculate how much you want to set aside for the plan year of Jan. 1 – Dec. 31 in a lump sum. Mass transit and parking spending account elections are based on a MONTHLY election amount. This monthly election will remain in place throughout the plan year unless you change it.

Deductions will be taken semi-monthly on a pre-tax basis. Only those associates who elect these accounts will be enrolled. After you’ve enrolled, as you incur eligible expenses (as defined by the IRS) throughout the plan year, you pay yourself back with the pre-tax money in your FSA account.

If you terminate employment, or if you become ineligible for the plan, please refer to the Termination of Benefit Summary chart available online for information about how long you may incur additional claims and deadlines for submitting those claims for reimbursement. These time periods vary by account.

Tax Effect
Contributions to FSAs reduce the amount of taxable income. This results in savings of FICM, FICA, federal and state income taxes.

Health Care Flexible Spending Account (FSA)

Health care flexible spending accounts (FSAs) help pay for expenses that are either partially covered or not covered by medical/prescription drug, dental or vision insurance. You may contribute up to $3,200 in 2024 in the account. You may participate in this account even if you have not enrolled in a Nemours medical plan and are not covered by another HSA-eligible plan.

For extensive details on qualified medical expenses, visit HealthEquity. In general, you may use a health care FSA to pay most health care expenses that qualify as a medical deduction for federal income tax purposes (as described in the IRS Publication 502) for yourself or your tax dependents. Health care expenses reimbursed through the FSA account cannot be claimed as deductions for federal income tax purposes.

Other Considerations

• Amounts not claimed over the IRS allowed rollover ($640 for 2024) are forfeited under the “use it or lose it” federal requirement.
• Eligible charges must be incurred during the plan year or run-out period. You will have 120 days after the end of the plan year to file eligible claims under the health care FSA.

Additional Claim Information
If you submit a claim for an amount higher than what you have contributed year-to-date to your FSA, you will be reimbursed up to the amount of your plan year election. Reimbursement consideration is based on when the service is rendered or a purchase is made, not when payment is submitted.

• You may use your debit card at an authorized vendor to avoid out-of-pocket costs for eligible expenses. (See FSA debit card section for more information on this option.) Alternatively, you may submit a claim via the HealthEquity mobile app, the HealthEquity member portal or fax.
• You may be required to provide an itemized receipt for your transaction. The IRS defines a valid receipt as a receipt that includes the vendor’s name, a description of the purchase, the amount of the purchase and the purchase date.

Worksheet to Calculate Health Care Contributions
Use the worksheet below to list the out-of-pocket expenses you expect to incur during the plan year (beginning with the coverage effective date). This worksheet will assist you in estimating the total amount to deposit into the health care FSA.

 

Dependent Care Flexible Spending Account (DCFSA)
DCFSAs allow you to set aside pre-tax dollars to provide care for your eligible dependents, so you (and your spouse) can work. This is for daycare expenses, not health care expenses for dependents.

Eligible dependents include anyone under age 13, your disabled spouse or other disabled person (including a parent or child), whom you can claim as a dependent for federal income tax purposes.

Costs for “activities” while a dependent is in a daycare are not eligible for reimbursement through the DCFSA. Examples of costs not eligible are: art, dance, piano and singing lessons. Only the cost for the actual daycare is eligible for reimbursement.

You may contribute up to $5,000 ($2,500 if you are married filing separately) per plan year into a DCFSA. You may be reimbursed for the cost of care given inside or outside your home by a professional caregiver. Participants must provide the provider’s EIN or Social Security number for reimbursement. Please note that the provider must report the monies paid as income and pay taxes on that income.

If you earned more than $150,000 in 2023, your DCFSA election will be limited to a maximum of $1,700 in 2024.

To enroll in a dependent care account you must meet at least one of the following qualifications:

• You are a single parent who works full-time
• You and your spouse both work, and your spouse’s annual income is greater than the amount you are claiming for dependent care
• Your spouse is enrolled full-time at a college or university for at least five months of the year
• Your spouse is medically disabled and cannot care for himself/herself/themself or your dependents

Note: If your spouse is a full-time student at least five months a year, or disabled, federal law limits the maximum pre-tax amount you may contribute. Contributions from highly compensated individuals may also be limited or amended as a result of federally required non-discrimination testing.

Worksheet to Calculate Dependent Care Contributions
Use the worksheet below to list the out-of-pocket expenses you expect to incur during the plan year (beginning with the coverage effective date). This worksheet will assist you in estimating the total amount to deposit into the DCFSA.

 

Transportation Accounts
Transportation FSAs allow you to set aside pre-tax dollars to cover mass transit or parking expenses related to your commute to and from work. There are two types of accounts, mass transit and parking. You may elect to participate in one or both of these accounts. The maximum monthly election is $315 for the mass transit account and $315 for the parking account.

Mass Transit Accounts
Mass transit eligible expenses include a transit pass, token, farecard, voucher or similar item (tolls are not reimbursable) entitling a person to transportation to and from work on a mass transit system. Some examples of mass transit include:

• Trains
• Subways
• Trolleys
• Buses

Expenses related to a commuter highway vehicle may also be eligible, ONLY if all of the following requirements are met:

• Must have seating capacity of six or more adults (not including the driver)
• At least 80% of the mileage use can reasonably be expected to be for purposes of transportation of employees between work and residences
• The number of employees carried is at least one-half of the adult seating capacity of such vehicle (not including the driver)

Accessing your mass transit account funds: The debit card is the only method to access your available mass transit funds.

Your debit card will be accepted only at merchants coded as a mass transit facility in the VISA transaction system such as a SEPTA or NJ transit station. A convenience store that sells bus passes would NOT be recognized.

Parking Account
Eligible parking expenses include the cost of parking your car at a facility at or near your office location (e.g., parking garage or lot), or the cost of parking at a facility located at or near a location from which you commute to work (e.g., Metro parking lot, train station parking lot).

Accessing your parking account funds: The debit card is the only method to access your available parking funds. Your debit card will be accepted only at merchants coded as a parking facility in the VISA transaction system such as the Metro parking lot or train station parking lot.

Debit Card

All associates who participate in any of the HSA, HCFSA, LPFSA or transportation account benefits will receive a benefit-specific debit card to pay for qualified health, mass transit or parking expenses. The debit cards look like a regular MasterCard or VISA, but are only accepted at specific types of merchants or provider locations.

Once you’ve enrolled, be on the lookout for your card.
Debit cards will be mailed to your home in a plain unmarked white envelope. Please read the cardholder agreement that is included with the card. Additional (up to three) or replacement cards may be requested through the member site at no extra cost.

Activation is easy…
Your new debit cards will arrive with a sticker on the front of the cards, and you must either activate the card at the member portal or call the number listed to activate them.

Where can I use the card?
You may use your debit card at the following locations:

• Any doctors’ or dentists’ office, or any hospital or clinic setting
• A pharmacy, grocery store or discount store with an approved Inventory Information Approval System (IIAS)
• A merchant coded as a mass transit or parking facility

If you use your card at an unqualified merchant, the transaction will be declined. You can download a list of merchants that have an IIAS system installed by entering the following web address in your browser: http://apps.sig-is.org/SIGISPublicRpts/IIASMerchantList.aspx.

What debit card transactions must be substantiated?
Certain debit card transactions will require you to submit physical documentation of the expense. Examples of such expenses include:

• Any transaction that is processed at a merchant that does not have an IIAS (including doctors’ and dentists’ offices) IF the amount is not a standard Nemours co-pay amount
• Any transaction other than a Nemours co-pay amount that is not recurring

How do I substantiate a debit card transaction?
If documentation is needed, you will be notified of the item(s) that require substantiation. Sufficient substantiation must include: date the expense was incurred, the amount of the expense, a description of the service provided or item purchased, the name of the recipient (you, your spouse or dependent) and the name of the facility or provider. Examples of sufficient documentation include a detailed pharmacy receipt or an insurance Explanation of Benefits statement.

What happens if I do not submit documentation for my debit card transaction?
If documentation is not submitted, IRS regulations require that card access for that participant be temporarily suspended until you provide the applicable receipts or repay the plan. You will be responsible for reimbursing the plan — by check or through payroll deductions — for any unsubstantiated amounts. If recovery is not possible, you will be taxed on the value of the unsubstantiated expenses.

How long can you use your card?
Your debit cards will be valid for three years. You will automatically receive new cards by mail during the month in which your card expires.

Other Information

Please remember you can get more information about these benefits online as well as access your HSA, FSA and transportation account. You may view detailed information such as your account balance, claim status and payment information. This information will be available to you 24 hours a day, seven days a week. If you have any questions regarding your account, please call HealthEquity Member Services at 866.346.5800 for FSA and HSA inquiries and 877.924.3967 for parking and transit inquiries.

To access your account, follow the simple steps below:

• Go to my.healthequity.com
• Log on using your benefits username and password
• Click on the appropriate benefit to access detailed information

You will be automatically and securely transferred to the member portal. Here you can:

• Check your HSA, FSA, transit or parking plan balances
• Input or update your direct deposit information
• Check the approval and payment status of the claims you have submitted
• Submit new claims for reimbursement (NOTE: substantiation for debit card claims should be uploaded through the portal or the mobile app)