Flexible Spending Accounts for Health Insurance
Source: Press Release, Office of the State Comptroller
New York State Comptroller Thomas P. DiNapoli is reminding New Yorkers of their eligibility to set aside pre-tax money for eligible health care and dependent care expenses by enrolling in employer-sponsored flexible spending accounts.
New York State employers may offer two programs that provide this pre-tax benefit: a Health Care Flexible Spending Account (which is different from a Health Savings Account) and a Dependent Care Flexible Spending Account.
In 2009, employees may deduct up to $5,000 per household in a dependent care account.
Although there is no official IRS limit to the amount of money that can be contributed to a Health Care account, many employers impose their own limits. For example, New York State employees have a $4,000 limit for unreimbursed health care expenses.
However, unlike other Federal benefits, an individual’s FSA election is only effective for one Benefit Period at a time. An individual must enroll each year that he or she elects to participate. Failure to enroll during the open enrollment period means that the individual cannot participate in the next Benefit Period year unless he or she subsequently experiences a “qualifying event.”
The open enrollment period for participation in 2009 ends on November 14, 2008 for New York State employees.
The Comptroller cautioned State employees that participation in these accounts doesn’t roll over, so even if an individual participated in his or her employer’s flexible spending program in 2008, re-enrollment is essential to continuing in the program during 2009. He also reminded New Yorkers eligible for the Earned Income Tax Credit that contributing to a flexible spending account has the effect of lowering their taxable income, and could therefore increase the amount of their credit under the EITC program.
Information about Flexible Spending Account is posted on the Internet at:
https://www.fsafeds.com/fsafeds/SummaryofBenefits.asp#WhatIsFSA
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