The month of November is Open Enrollment for the Section 125 Flexible Spending Plan (FSA), and electing contributions to a Health Savings Account (HSA). The effective date for the enrollment is January 1, 2015. Open enrollment is the only time, barring qualified life events, when eligible, full-time employees can enroll in FSA benefits for the new calendar year. Benefits include:
- An FSA allows you to set aside pre-tax dollars to apply to out-of-pocket expenses for eligible medical, dental, vision, pharmacy and dependent care.
- By using pre-tax dollars for eligible expenses, you ultimately lower your taxable income, which saves you money.
The FSA can be used in addition to other insurance plans in which you may already participate.
Important New IRS Changes to FSAs
Last year, the IRS announced that up to $500 of any unused dollars left in your account and the end of the year can be rolled over and be used in the next calendar year for eligible expenses. The rollover amount will not count toward the annual election limit of $2,500, meaning that you could potentially have a $3,000 balance at the beginning of each election year. Any amount that you contribute but do not use in 2015 above $500 will be forfeited to the IRS. Please calculate your annual health care costs and plan your elections carefully. For more information on the rollover changes, visit isihr.com/news/fsa-rollover-changes and isihr.com/news/fsa-rollover-qa.
The maximum annual election amount for personal Health Care Expenses is $2,500 per plan year. Dependent Care Expenses remain at 2012’s maximum annual contribution of $5,000.
How can I Participate in an FSA?
You do not need to fill out any paper forms to enroll! All enrollments can be done through our Online Benefits Enrollment System.
- Visit benefits.isihr.com. You will be asked to enter the default user name and password. Please contact us for this information.
- You will see an Enrollment button on the welcome page. There you will be able to calculate contributions and make your elections.
- Anyone wishing to participate in the FSA Plan must enroll no later than November 30th.
All new hires or newly benefits eligible employees must satisfy a 60-day waiting period before this benefit will be effective. If you have recently started a new job or new position with your company and wish to contribute to an FSA, you can still select your contributions during this Open Enrollment period, but your effective date may be later than January 1, 2015. The effective date is the first day of the month, following 60 days of benefits eligible employment. For example, if your first day of work was on November 10, 2014, your effective date for the FSA benefit will be February 1, 2015.
If you have previously participated in an FSA Plan, you must make new elections before November 30, 2014 if you wish to continue participating. The plan does not automatically renew each calendar year. All eligible employees, whether electing an FSA for the first time or long time contributors, must log in to the Online Benefits Enrollment system and choose contributions each year in order to participate.
You may also choose to select a pre-paid MasterCard issued by National Benefits Services (NBS) to pay for your qualified expenses, rather than submitting receipts and claim forms for reimbursement. There is a fee associated with ordering the NBS card, which you can learn more about when you log in to the Online Benefits Enrollment system. In September, 2014, NBS changed debit card vendors and issued all participants new cards. If you already have an NBS issued card from participating in a Flex plan in 2014, you can elect to continue to use this card. It is important that you do not throw it away if you wish to renew the card. New cards can be re-issued if lost, but an additional fee will apply. There is more information on how to submit claims and ordering the NBS pre-paid MasterCard attached to this email.
Electing an HSA (Health Savings Account)
If you are currently participating in a Qualified High Deductible Health Plan (HDHP), you are eligible to contribute pre-tax dollars to an HSA. An HSA is similar to an FSA, in that they both provide a tax benefit (lower your taxable income), and both are used to pay for eligible health care expenses. The HSA differs from the FSA in that it has a higher maximum annual contribution ($3,350), and the money in your account will roll over from year to year and earn interest. The Online Benefits Enrollment system will give you more information on how to set up this account; you can use one of ISIhr’s partners, Health Equity, or you can set up an account with your own banking institution.
If you do not currently participate in an HDHP, you will not be eligible for an HSA, and the only available option to you while in the Online Benefits Enrollment system is to waive this coverage. If you participate in an HSA, you will not be allowed to participate in an FSA. A limited purpose FSA can be used with an HSA, but only during enrollment overlap, and the limited purpose FSA cannot be used on medical expenses – only dental and vision expenses.
As always, it is our pleasure to offer these benefits to you. For any questions about Open Enrollment, the Online Benefits Enrollment System, or the benefits that are being offered, don’t hesitate to contact your Human Resources Representative or our Benefits Department.