The City offers a Flexible Spending Account (FSA) plan that is administered by Auxiant. These accounts give employees the benefit of allocating money on a pre-tax basis to reimburse out-of-pocket medical and dependent care expenses. Employees do not need to participate in the City’s health insurance plan in order to participate in the FSA. Also, employees who wish to participate must enroll each plan year as there is no automatic renewal process.
How it Works
Contributions are deducted in equal amounts from each paycheck, pre-tax, throughout the year. Upon enrolling, employees will immediately be able to use their total elected amount to pay for eligible medical expenses but will only be able to use what has been deducted from their paycheck for dependent care expenses. Employees can submit claims for reimbursement online or via mail. A copy of the EOB (Explanation of Benefits) or itemized receipt is necessary to verify expenses and validate reimbursement.
The Process
For this example, an employee visits their healthcare provider and receives the EOB in the mail. The employee must then submit a claim reimbursement form with a copy of the EOB to Auxiant’s Flexible Spending department. (If the employee elected automatic rollover for their claims, they will not need to submit a reimbursement form or copy of the EOB. These claims will automatically be reimbursed to you.) Auxiant will then reimburse via direct deposit or paper check, dependent upon what the employee elected during open enrollment.
Deadlines
The FSA is a “use it or lose it” policy. All claims for reimbursement must be accrued between January 1st of the plan year and March 15th of the following year. All reimbursements must be submitted by June 13th of the following year.
Medical Expenses
Qualified medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body. These expenses include payments for legal medical services rendered by physicians, surgeons, dentists, and other medical practitioners and include the costs of equipment, supplies, and diagnostic devices needed for these purposes. They also include the amounts you pay for transportation to get medical care. They do not include expenses that are merely beneficial to general health such as vitamins or gym memberships. A complete list of eligible expenses to provide some general guidance can be provided. Additional information is available from the IRS website.
The maximum election allowed for medical expenses is determined annually by the IRS.
Dependent Care Expenses
Dependent care expenses are childcare costs as well as before-school and/or after-school care, as long as the child is under the age of 13.
The maximum election allowed for dependent care expenses is determined annually by the IRS.