- What is a Flexible Spending Account (FSA)?
An FSA is a benefit that enables you to set aside pre-tax dollars from your paycheck to pay for eligible health care and dependent care expenses.
Health Care FSAs can be used for you and qualifying individuals (i.e. spouse & dependents) for eligible health, vision, or dental expenses remaining after claims have been paid by any insurance plan. For example, copays, co-insurance, deductibles, dental care, eye glasses, and more. For a complete list of eligible health care FSA expenses visit the WageWorks© website.
Dependent Care FSAs can be used to pay for day care expenses while you or your spouse are at work, looking for work, or at school. It can also be used for expenses such as elder care and day care expenses for any incapacitated person you are eligible to claim on your income taxes. For a complete list of eligible dependent care FSA expenses visit the WageWorks© website. Note: The Dependent Care FSA may not be used for medical expenses.
You can choose to enroll in one or both of these FSA plans as long as you have enough money in your paycheck to cover the amount you choose to contribute to an account.
- When is the 2018 Flexible Spending Account (FSA) Open Enrollment period?
The 2018 Flexible Spending Account (FSA) Open Enrollment period will run from November 1, 2017 until 11:59 p.m. on November 30, 2017. This enrollment is for the 2018 plan year, which extends from January 1, 2018 to December 31st, 2018.
The Grace Period for the 2018 FSA plan year will runs to March 15, 2019, and the run-out period deadline for providing claim substantiation ends May 31, 2019.
- How do I contribute to an FSA?
When you enroll in an FSA, you will decide how much money you would like set aside for the plan year. This amount is considered your Annual Goal, and will be deducted from your check pre-tax and placed into your FSA. You can determine the amount you’d like to contribute to your FSA in one of two ways:
Determine your Annual Goal and divide it by the number of pay-periods in which you would like it to be deducted from your paycheck. There are 26 pay-periods in a year; you can select anywhere from 1 to the entire 26. This will give you the amount per pay-period you will have deducted from your paycheck, in order to reach your Annual Goal.
Decide the amount per pay-period you can afford to have deducted from your paycheck, then multiply that by the number of pay-periods you would like to have the deduction come out (1-26). This will give you your Annual Goal for the plan year.
- How do FSAs save me money?
Throughout the plan year, you use the money that was deducted from your paycheck and contribute to your FSA to pay for eligible health care or dependent care expenses. These are expenses that you would have to pay out-of-pocket, even if you didn’t have an FSA (e.g., day care bills, copays, eye glasses, dental care, and more). But with the use of an FSA, you are now using money that you did not have to pay taxes on to do so. Without an FSA, you would pay taxes on the money you use to pay for these eligible expenses, costing you more out-of-pocket. Review the How FSAs Can Save You Money resource document for a additional information.
- How much can and should I contribute to an FSA?
The 2018 plan year maximum contribution for a Health Care FSA is $2,650 per year. The maximum contribution for a Dependent Care FSA is $5,000, up to the maximum family amount for which you qualify.
The 2017 plan year maximum contribution for a Health Care FSA is $2,600 per year. The maximum contribution for a Dependent Care FSA is $5,000, up to the maximum family amount for which you qualify.
The minimum amount per pay-period you may contribute to each account is $2.00. The total amount you decide to elect for the plan year is called your Annual Goal; you may not change your Annual Goal once FSA Open Enrollment ends, unless you have had a qualifying life event.
It is important to only contribute as much as you can reasonably expect to spend on out-of-pocket health care or dependent care expenses (based on the FSA you select) for the coming year. Unspent funds remaining in accounts at the end of the Grace Period (ending March 15th of the following year) will be forfeited.
- What are the differences between the Health Care and Dependent Care FSAs?
Second, is when account funds are available for you to use.
Health Care FSA - the entire Annual Goal is available at any time throughout the plan year, regardless of the amount that you have put into the account. That means when the plan year begins on the first of the year, you have access to your full Annual Goal.
Dependent Care FSA - you will only be reimbursed up to the amount that is currently in your account, regardless of the Annual Goal you have elected. For example, if you are submitting a reimbursement claim for $400.00 and only have $200.00 in the account, you will initially be reimbursed for $200.00 and reimbursed for the rest once the funds are deducted from your pay and deposited in your account.
Third, with the Health Care FSA, you will have access to the Health Care Card. The Card works like a credit or debit card that gives you full access to your account funds. The Health Care Card is not available for Dependent Care FSAs.
- I've heard about an FSA Grace Period. What is this?
Internal Revenue Service Notice 2005-42 permits a plan to establish a Grace Period of two months and 15 days following the end of each plan year during which unused contributions in either your Health Care or Dependent Care Flexible Spending Account (FSA) may be reimbursed for qualifying expenses incurred during the grace period. The State of Michigan has established this Grace Period for their FSAs.
Since the State of Michigan’s FSA plan years end on December 31st, you may incur qualified expenses through March 15th of the following year to use any remaining funds from your previous plan year account(s), as long as you are an active participant in the Health Care or Dependent Care FSA or have met your Annual Goal prior to your employment ending.
The Grace Period should not be confused with the run-out period. The run-out period allows you additional time to submit requested substantiation for your prior plan year FSA. The State of Michigan’s run-out period ends on May 31st, meaning you will have until May 31st to submit requested receipts and documentation for the prior plan year.
- Should I include the Grace Period when calculating my future Annual Goal for my FSAs?
No, you should continue to use only the calendar year (12 months) for calculating expenses for your FSAs. The Internal Revenue Services (IRS) Grace Period is intended to provide a safety net for you only if you have not incurred all of your anticipated expenses during the previous plan year.
- What is the WageWorks© Health Care Card?
The WageWorks© Health Care Card allows you to pay for eligible purchases directly from your Health Care FSA. The Card works like a credit card, except the funds are deducted from your Health Care FSA, as governed by IRS regulations. The Card can be used at medical, dental, vision appointments, retail establishments, and pharmacies.
WageWorks© issues a new Health Care Card for those who are newly enrolled, and when existing cards expire. The Health Care Card will expire every three years. You should continue to use your current Health Care Card until you are issued a replacement from WageWorks©.
To activate the Card you must use the last four digits of your Employee ID#. Cards for your dependents are activated by using the last four digits of their Social Security Number (SSN), rather than the employee's SSN. You will not be charged a fee to obtain, activate, or use the Card.
The Health Care Card cannot be used for Dependent Care FSA expenses. For additional tips and information on using the Card, go to www.wageworks.com/card.
- What payment options are available for FSAs?
Health Care FSAs:
- Swipe your WageWorks© Health Care Card at the point of sale.
- Log in to your account at www.wageworks.com to submit an online Pay Me Back Claim, or, use the Pay My Provider option.
- Download the WageWorks© EZ Receipts app and take a photo of your itemized receipt and submit your claim.
- Mail or fax a claim form to WageWorks©.
Dependent Care FSAs:
- Do I need to save or submit documentation for my FSA expenses?
Yes, per IRS regulations, you must save your itemized documentation for tax purposes. This includes receipts, bills, and any other documentation you may receive detailing your expenses. When using the Health Care Card or otherwise, WageWorks© may request that you provide documentation such as a detailed receipt to validate a claim at any time throughout the plan year. The last day to substantiate reimbursement requests through WageWorks for the 2018 plan year is May 31st, 2019.
Note: Health Care FSA participants using the Health Care Card must submit requested substantiation receipts within 90 days of the original transaction date, to WageWorks©, or the Card privileges will be suspended.
- How will I know if documentation is needed for my claims?
WageWorks© will notify you through your preferred communication method of online account, mail, text message, or email. You may select your preferred communication method through your WageWorks© account. You are strongly encouraged to log into your WageWorks© account on a regular basis to monitor requests. It is your responsibility to ensure all outstanding claims have been substantiated no later than May 31st, 2019 for the 2018 FSA plan year.
- What happens if I do not send itemized documentation to WageWorks©?
If using the WageWorks© Health Care Card, the Card will be suspended if you do not submit documentation to WageWorks© within 90 days of the original transaction date. If your Card is suspended, it will be reactivated within 24 - 48 hours after receipt or repayment has been processed and approved for all unverified Card transactions.
If using a Pay Me Back claim, WageWorks© will recoup the unsubstantiated amounts through your next Pay Me Back claim submission.
If any amount remains unsubstantiated after the run-out period (May 31st) and is not recouped by WageWorks©, you will be required to repay the amount as defined by Michigan Civil Service Commission Regulation 5.19. This means the unsubstantiated amount will be recouped from your pay or you will receive a corrected W-2.
- Do I need to submit anything else with a claim?
Yes, an itemized bill, receipt, or Explanation of Benefits (EOB), from the provider must be included, showing the following:
- Patient name
- Provider name
- Type of service
- Date(s) services were provided, and
- Amount you were charged, or your cost after insurance settlement
Account statements must include all of the above bulleted items, for each expense, if they are to be used instead of a receipt. Over-the-counter (OTC) prescription receipts must also include the prescription number, or a copy of the actual prescription. Certain eligible expenses also require a Letter of Medical Necessity, signed by your doctor, in order to receive reimbursement.
- How can I view important account information, such as required documentation for a claim, whether my claim has been processed, my account balance, etc.?
This information is available by registering on the WageWorks© website at www.wageworks.com. You are strongly encouraged to access your WageWorks© account on a regular basis to assist you in managing your FSA(s), and monitor substantiation requests. If you are unable to obtain the information you are looking for, or have any account issues feel free to contact WageWorks© Customer Service Center at 877-924-3967, Monday through Friday, 8:00 a.m. - 8:00 p.m.
- How do I report a lost Health Care Card or request additional Cards?
Additional WageWorks© Health Care Cards for yourself, spouse, and qualified individuals (over age 18) can be requested by accessing your WageWorks© account (www.wageworks.com), and selecting Card Center at the top of the page. There is no charge to you for additional Cards.
To report a lost or stolen Card, contact WageWorks© Customer Service Center at 877-924-3967, Monday through Friday, 8:00 a.m. - 8:00 p.m. Additional Card requests are also accepted by phone. Use the last four digits of your employee ID#, rather than the last four-digits of your SSN when calling.
- What happens to my FSA if I am seasonal, departed, retired, laid off, or on a leave of absence?
Health Care FSA:
Seasonal employees – Seasonal employees who are enrolled in a Health Care FSA and are laid off will have their account suspended and Cards inactivated until returning to work. If returning to work in a different plan year, contact the Employee Benefits Division at 800-505-5011.
Departures, Retirees & Layoffs – Health Care Spending Accounts for these employees will end and Cards will be inactivated the last day of the pay-period worked. Individuals wishing to achieve their annual goal and continue their Health Care FSA benefit should contact the Employee Benefits Division at 800-505-5011, 30 days prior to this event taking place, when possible. Note: If you have paid your entire Annual Goal prior to leaving State service, WageWorks© will be notified and will extend your account through the end of the plan year and corresponding grace period.
Leave of Absence - Employees with a Health Care FSA who are placed on a leave of absence or experience "lost time" will have full use of this FSA and the Health Care Card while off of payroll. Employees will be required to make-up any missed contributions upon returning to work.
Dependent Care FSA:
Seasonal employees – Seasonal employees who are enrolled in a Dependent Care FSA and are laid off will have their account suspended. If returning to work in a different plan year, contact the Employee Benefits Division at 800-505-5011.
Departures, Retirees & Layoffs - Your eligibility for the Dependent Care FSA ends on your last day of work. Expenses incurred while you are not actively at work will not be eligible for reimbursement.
Leave of Absence - Your eligibility for the Dependent Care FSA ends on your last day of work. Expenses incurred while you are not actively at work will not be eligible for reimbursement. If you return to work during the same calendar year, dependent care expenses incurred are again eligible for reimbursement. Your contributions will restart at the same bi-weekly contribution in place before you left, unless you request a change due to a qualifying life event.
- Who do I contact regarding questions about claims and substantiation that I have or may still need to submit?
The WageWorks© Customer Service Center should always be your first point of contact. They can be reached at 877-924-3967, Monday through Friday, 8:00 a.m. - 8:00 p.m. Their customer service staff has detailed information regarding your account and can confirm what documentation has been received, processed, and/or identify any outstanding issues. You can also log into your WageWorks© account (www.wageworks.com) to confirm whether you have any claims that require substantiation.
- What happens if I do not seek reimbursement or submit requested substantiation (receipts) for the prior plan year by the end of the run-out period?
In accordance with IRS regulations, if you do not seek reimbursement for your claim(s) with WageWorks© by the May 31st run-out period deadline for the prior plan year's account, funds remaining in your account for that plan year will be forfeited. Also, any claims that WageWorks© requests substantiation documentation for that are left unsubstantiated after May 31st will be recouped by the State of Michigan on a post-tax basis. These funds will be taken via payroll deuction on a bi-weekly basis until the full amount of the ubsubstantiated claims are recouped.
Exception: Under the "Heroes Earnings Assistance and Relief Tax Act of 2008" (H.R. 6081), employees called to active military duty for a period of at least six months would be allowed to receive a taxable distribution of their Health Care FSA funds to avoid forfeiture. This law is considered an optional enhancement to the Health Care FSA plans. The State of Michigan has adopted this enhancement to the plan.
- What happens if I have money left in my 2017 FSA during the Grace Period?
You are able to use remaining funds in your 2017 FSA(s) to pay for expenses incurred during the January 1, 2017 to March 15, 2018 Grace Period. All standard payment options are available to eligible employees during the Grace Period, including the WageWorks© Health Care Card, claim submissions using the Pay Me Back Claim Form, and the www.wageworks.com online claims reimbursement methods, or through the WageWorks© EZ Receipts smartphone app. Reimbursement Requests (claims) and requested substantiation documentation must be submitted by May 31, 2018. Your eligible claim(s) will be paid up to the balance remaining in your 2017 account.
Funds are withdrawn during the Grace Period using the “First-In, First-Out” method, where your 2017 contribution will be exhausted before drawing from 2018 plan year funds (if you enroll for 2018). If you exhaust your 2017 FSA contribution funds before the end of the grace period, money will begin to be drawn from your 2017 FSA(s) to pay for expenses. If you do not enroll for the 2018 plan year, you will simply have the Grace Period to exhaust the remaining funds in your 2017 contribution.