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Human Resources

Flexible Spending Account (FSA)

For 2008 the health FSA annual maximum has increased from $2,500 to $3,000. This means that employees may have up to $3,000 of eligible health expenses reimbursed on a tax-free basis.

Health Care Expenses

Only the portion of the expenses you owe after insurance payments can be claimed. Qualifying expenses are those that are incurred by the taxpayer during the Plan year for medical care as defined in Section 213(d) of the Internal Revenue Code, excluding all insurance premiums and long-term care expenses.

Qualifying health care expenses include amounts incurred for the diagnosis, cure, mitigation, treatment, or prevention of disease, and for treatments affecting any part or function of the body. The expenses must be primarily to alleviate or prevent a physical or mental defect or illness.

However, expenses qualify for the medical FSA based on when they are incurred, not when paid, and federal regulations do not allow any insurance premiums or long-term care expenses to be included under the FSA. Over-the-counter drugs are reimbursable if purchased for a specific medical need, and not for general health. For more information on over-the-counter drugs visit www.asiflex.com.

Examples of eligible expenses include:

alcoholism, drug or substance abuse allergy relief ambulance service artificial insemination artificial eye artificial limb/teeth bereavement & grief counseling co-pays contact lenses and solutions Christian Science Practitioners fees prosthesis chiropractor’s fees daycare charges prescription co-payments/drugs deductibles dental expenses dentures (bonding & sealants for dentures) doctor’s fees eyeglasses/contacts/LASIK eye surgery glasses

hearing aids including batteries insulin medical alert bracelet midwife services nursing services over-the-counter medicine used to treat a medical condition orthodontia (braces) over-the-counter reading glasses oxygen smoking cessation items psychotherapy & psychoanalysis counseling routine physical exams smoking cessation transfer of medical records charges transportation expenses related to illness vision care expenses

Non-qualifying health expenses include:

cosmetic procedures*; e.g. face-lifts, skin peeling, teeth whitening, veneers, hair replacement, removal of spider veins.
sunglasses, non-prescription
clip-on sunglasses
toiletries
expenses that are merely beneficial to your general health
herbs, vitamins, and nutritional supplements (if purchased solely for general good health purposes)
Long-term care expenses

* These do not generally qualify. For a medically necessary cosmetic procedure, enclose a note with the claim stating the existing medical condition and why the treatment is required.

See the FSA Summary Plan Description and FSA Plan Document for more details.