How to use the BESTflex Plan
What is a flex plan?
A Flexible Spending Account (FSA) is a convenient way for participants to save money on out-of-pocket health care and dependent care expenses using tax-free dollars. Employers save money in taxes on every dollar participants contribute to the plan.
How does the BESTflex Plan work?
Each year participants elect to place a portion of their paycheck into one or more FSAs and use these funds to pay for eligible medical expenses. Since elections are deducted from their paychecks pre-tax, participants pay less tax and as a result pay less for health and dependent care expenses.
Health Care Flexible Spending Account (HCFSA)
Participants use the HCFSA for out-of-pocket medical, vision, and dental expenses that are not covered by another health plan. The HCFSA is not available if participants or their spouses participate in a Health Savings Account (HSA). In this case, a Limited Health Care FSA is used, reimbursing dental and vision expenses only. IRS rules prohibit returning funds remaining in either account to participants once the plan year ends.
Using the HCFSA account
Participants can spend money from their HCFSA, up to their total election amount, anytime during the plan year. The balance of the total election amount is withheld from their paychecks throughout the plan year.
Dependent Care Flexible Spending Account (DCFSA)
Participants use the DCFSA to pay for daycare expenses for children or other eligible dependents. Participants (and their spouses) must work or be a full-time student to use this account. IRS rules prohibit returning funds remaining in the account to participants once the plan year ends. Also, participants cannot apply the Federal Tax Credit for dependent care expenses to the amount they spend in the DCFSA.
Using the DCFSA account
Participants can only be reimbursed for an expense if the total amount of the expense is available in their account when they request reimbursement and after they have received the service. The current balance in the DCFSA is the maximum reimbursement participants can receive.
Group Insurance Premium Payments
Employers withhold payroll dollars to pay for participants' medical or other group insurance premiums. With the BESTflex Plan, this withholding becomes an automatic, pre-tax deduction.