Offering Flexible Spending Accounts will let employees take advantage of tax-effective opportunities allowed by current tax laws and regulations. Money put in a Flexible Spending Account is free from federal and state and local taxes and Medicare contributions.

Let’s say you need to buy a pair of glasses that cost $85. If you are in a 15 percent tax bracket, you must earn $100 pre-tax to receive $85 in take home pay. However, if you set aside money in a Flexible Spending Account for the glasses, you only use $85, not $100, since no tax will be deducted from the amount set aside.

There are three types of accounts: 1) Health Care, 2) Dependent Care, and 3) Premium Only Plan.  The Health Care plan allows you to pay for vision, dental and post-deductible medical expenses. The Dependent Care Account may be used to pay for dependent care expenses that enable you and your spouse to work. The Premium Only Plan allows employees who are required to pay a portion of their medical or dental insurance premium, to do so on a pre-tax basis.  Note that If you elect to participate in the City's medical or dental insurance plan, you automatically will participate in the Premium Only Plan.

No.  Claims are reimbursed as monies are withheld and deposited into your account.  The dates of service must be incurred prior to reimbursement.  For example, if you pay your childcare provider on Monday for the entire week, the claim cannot be reimbursed until Friday, when the dates of service have been rendered.

No. The money you contribute to the account can only be used to reimburse the expenses of dependent care provided while you are working.

Examples would include: Kindergarten fees, deposits, field trips, transportation, overnight camps, annual membership fees to YMCA programs, clothing, or food.

No. IRS regulations require the two accounts to be separate.

No. As required by law, the payment is made directly to you.

No. These payments are not taxable under current law.

You will pay the remaining expenses as you have in the past — with after-tax dollars.

Any funds deposited in a Flexible Spending Account and not used by the end of the plan year ARE FORFEITED. However, with over-the-counter medications being approved, this is not as likely to happen.

You may submit claims until March 31 for Flexible Spending Account expenses that you have incurred during the previous year.

Yes, however, full reimbursement before the work is completed for the entire orthodontia expense can not be made, according to the IRS. Also, a letter stating the medical necessity of the work must be obtained from the provider listing the service dates (for adjustment, etc.) throughout the year. You may be reimbursed according to the service dates for a monthly payment schedule, or, if you choose to pay the entire bill at the beginning of the year, you can be reimbursed 50 percent of the total bill, with the remaining 50 percent being paid in monthly increments, according to the service dates. Orthodontia expenses are still allowable, however the IRS is simply stating there must be a medical reason (versus cosmetic) and that the entire bill cannot be reimbursed before the entire service has been rendered.

If you want to get a tax break and pay for your health care and dependent care expenses with pre-tax dollars, Flexible Spending Accounts are a good way to do that. The key is careful planning. Generally, it may be to your benefit to underestimate your expenses and put a little less in the account than you think you will need to avoid a chance of forfeiting the money.

You have 90 days following the last day of employment in which to file claims for expenses incurred prior to that date. Any remaining balance is forfeited.

No, You may only sign up during the enrollment period (typically, a two week period in the fall), upon hiring by the City or if you have a qualifying event, such as a marriage, divorce or legal separation, birth or adoption of a child, death of a spouse or dependent, involuntary reduction in work hours or termination of your spouse’s employment.