Flexible Spending Accounts

It's a fact: we're all spending more on health care, dependent care and other everyday wellness needs than ever before. That's what makes the flexible spending account (FSA) program so valuable - it's an easy, convenient way to help stretch your health and dependent-care dollars.

Through your FSA, you set aside money from your pay before taxes are deducted. That money is still yours to spend, but no taxes are taken out of it - ever!

How does that add up? It depends on how much you spend on health-care and dependent-care expenses each year. But for every $100 set aside through the FSA, most people can save from $30 to $40 on their total payroll taxes including:

Federal income tax
FICA (Social Security) taxes
State income tax (in most states)

OneBeacon offers both a health care and dependent care spending account which is administered by ADP. You will be able through FlexDirect to view and submit claims for your FSA accounts. You must use the funds or you will lose them, so it's important to estimate carefully.

Annual Grace Period and 'Use it or Lose it"

The OneBeacon Flexible Spending Account includes the IRS extension or Annual Grace Period (AGP). This allows you extra time to incur claims and submit them for reimbursement. As long as you are actively employed on 12/31 of the plan year you can continue to spend money against your FSA. Employees' have until March 15th of the following year to incur eligible expenses and until May 31st to submit these claims.
If you do not use all your funds or terminate mid year you will lose any remaining funds (unless COBRA election) left in your FSA. COBRA is only available for health care spending accounts and on an after tax basis. Mid year terms have 150 days to submit claims for eligible expenses prior to their termination date.

Want to know more about flexible spending accounts? Click on the following links for more information:

Health care spending account

Dependent care spending account