Money experts advice workers to put at least ten to twenty percent of their net disposable incomes in their savings accounts before they even touch a dime of their earnings. This is sound advice. Except for the natural penchant of money to slip through our fingers. Most of the time, we’ve already spent half of it before realizing that we haven’t saved a penny yet and it’s too late to get ten to twenty percent for savings.
Thankfully, the Federal Flexible Spending Account Program or FSAFEDS is a benefit that allows federal employees to save money by. Money is contributed from your salary before taxes are withheld, thus giving you opportunities to pay less tax and save money at the same time. FSAFEDS allow you to incur eligible expenses in dependent care, health care and out-of -the-pocket costs of vision and dental care.
Three types of enrolment are available under the FSAFEDS benefit: 1). Dependent Care FSA, 2) Health Care FSA and 3) Limited Expense Health Care FSA.
The Dependent Care FSA is for those that you and your spouse, if you’re married, can use for eligible dependent care for children before 13 years old or any mentally-incapacitated or physically-incapable adult who is a declared dependent on your Federal Tax Return. This enrolment covers expenses for child care, before and after school care, late pick up fees and adult day care, thus allowing you to work, look for work or further your studies by attending school full-time.
Health Care FSA reimburses expenses that are not typically covered by FEHB, FEDVIP or other insurance. This includes chiropractic services; coinsurance, copays and deductibles; contact lenses, solutions, cleaners and cases; dental care and procedures; eye surgery; eyeglasses and prescription sunglasses; hearing aids and batteries; infertility treatments and over-the-counter medicines and products.
The Limited Expense Healthcare FSA reimburses products and services related to dental care like cleanings, fillings and crowns; and vision care like contact lenses, eyeglasses and refractions, among others.
Most federal employees are eligible to enroll in the program. Retirees, however, aren’t. New and newly eligible employees who have experienced a life qualifying event have 60 days from their hire dates to enroll in the program before October 1. Otherwise, you wait until the next Federal Benefits Open Season held each fall to enroll. A very important thing to remember about the FSAFEDS is that it is filed yearly. Thus, contributions and benefits must be planned conservatively-otherwise, you will lose money if you do not incur reimbursable expenses and file timely claims.