Flex Spending Enrollment
Open enrollment for flexible
spending accounts ends Friday, Dec. 2. FSAs allow employees to set aside a
portion of their pay before taxes to cover eligible medical and dependent care
expenses. The pre-tax benefit can save 25-40 percent when compared with not
opening an FSA. Beginning in January, the accounts will be managed by the
company WageWorks. Participants will be issued a “take care VISA” debit card to pay for eligible health care and
dependent care expenses.
“WageWorks is also managing the health reimbursement account (HRA) for non-represented employees and for the food, maintenance and police workers represented by AFSCME,” said Kristen Bjorne (Human Resources). Both groups are moving to the Blue Cross Blue Shield Community Blue 2 plan, which has higher deductibles and co-pays than Community Blue 1, beginning in January. “The FSA and HRA accounts have to be administered jointly, which a third party like WageWorks can do effectively. Employees in those two groups who enroll in an FSA must exhaust those funds first before HRA funds can be used. This allows eligible employees to take advantage of pre-tax savings first because the money in the FSA must be used by year-end or forfeited. HRA monies roll over to future years.”
Bjorne said there is an interactive website with secured log-in where participants can monitor their account balances and obtain educational information. They also can access forms to file manual claims if health or dependent care providers don’t accept the card. In those cases, either a check is mailed to their homes or a deposit made directly to their accounts.
“Most providers and pharmacies will accept the card, but in cases where payment is not required at the time of service, a manual claim will need to be filed,” said Bjorne. “Flexible spending account participants have asked for VISA capability in the past, so we’re excited that our agreement with WageWorks will allow us to offer the technology and meet that demand.”
Employees who invest $100 before taxes in an FSA will be able to apply the full $100 toward eligible expenses. Without an FSA, the amount available is roughly $60-$75 after taxes. Despite the clear benefit, only 105 NMU employees enrolled in a flexible spending health account this year; about a dozen set aside funds for dependent care.
Bjorne said an account is especially worth considering for those who have any out-of-pocket expenses not covered by insurance, including co-payments and deductibles, prescriptions filled regularly, monthly payments for orthodontic services and glasses or contact lens purchases. Those who don’t have a clear projection of costs can make a conservative estimate and still save money by setting it aside before taxes.