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<br />An Introduction to Your Flexible Spending Accounts (FSAs) <br /> <br />The City of Martinsville and Martinsville City Schools offer you a way to pay eligible health, dental, and <br />vision care and dependent care expenses with before tax dollars-flexible spending accounts (FSA). <br /> <br />The accounts allow you to set aside a portion of your before tax pay through payroll deductions to <br />reimburse eligible health, dental, and vision care or dependent care expenses. The money you would pay <br />in taxes can instead make your health care and dependent care dollars go further for qualified expenses. <br /> <br />When you enroll, it is important to carefully estimate your eligible expenses for the upcoming year. <br />Because FSAs are a tax-favored benefit, IRS rules apply. A participant may have up to 2 1;2 months to <br />spend money leftover in their FSA's at year's end. The effect of the grace period is that the participant <br />may have as long as 14 months and 15 days (the 12 months in the current cafeteria plan year plus the <br />grace period) to use the benefits or contributions for a plan year before those amounts are "forfeited" <br />under the "use-it-or-lose-it" rule. Forfeited amounts help to offset the administrative costs of the <br />program. <br /> <br />How does the Flexible Spending Accounts (FSAs) work? <br /> <br />You may enroll in either or both of these accounts: <br /> <br />· Medical Care Flexible Spending Account; and/or <br />· Dependent Care Flexible Spending Account. <br /> <br />How to Enroll <br /> <br />To participate, you must enroll within 30 days of the date you are hired. Your account contributions <br />begin as soon as administratively possible. Based on your anticipated eligible health care and dependent <br />care expenses, you decide how much to contribute, up to the plan contribution limits. You must re-enroll <br />each year during Open Enrollment. <br /> <br />Contributing to Your Account <br /> <br />The amount you elect to put in your accounts is contributed over the plan year in equal installments each <br />pay period. Your paycheck is reduced by the amount of your contribution. Since contributions are made <br />before taxes are withheld, you do not pay Social Security tax, federal income tax, and state income tax on <br />the money you put into your account. <br /> <br />Maximum and Minimum Annual Contributions <br /> <br />The chart below shows the maximum amount you can contribute to each account each year. <br /> <br /> Maximum Annual Contribution Minimum Annual Contribution <br />Medical Care Flexible $5004 each year $240.00 ($20 per pay period) <br />Spending Account <br />Dependent Care Flexible $5000 $600.00 ($50 per pay period) <br />Spending Account <br /> <br />2 <br />