8 CITY OF LAMAR FLEXIBLE SPENDING ACCOUNTS Administered by Rocky Mountain Reserve Flexible Spending Accounts (FSAs) allow benefit eligible employees to use pretax dollars for healthcare or child/dependent care expenses not covered by insurance plans. Employees contribute a portion of each paycheck to an FSA and save significantly on taxes. Money in an FSA can be used to pay for out-of-pocket medical, dental and vision expenses or dependent care expenses. Employees do not need to be enrolled in the City’s health plan or any health plan to have an FSA. The City of Lamar offers you a choice of a Healthcare Flexible Spending Account, Limited Purpose Flexible Spending Account, and a Dependent Care Flexible Spending Account. Healthcare FSA—PPO 2000 A Healthcare FSA is a pre-tax benefit account used to pay for eligible medical, dental, and vision care expenses that aren’t covered by your insurance plan or elsewhere. It’s a smart, simple way to save money while keeping you and your family healthy and protected. The IRS sets a limit on how much you can contribute to this account each year. For 2024, the spending limit is $3,200.* Limited Purpose FSA—HDHP 2500 A Limited Purpose FSA (LPFSA) is a flexible spending account that only reimburses you for eligible dental and vision expenses. A LPFSA is available to employees who are enrolled in a high deductible health plan (HDHP); you may enroll in both the LPFSA and the HSA. By establishing a LPFSA, you can save money on taxes by using your LPFSA dollars for your dental and vision expenses ONLY while preserving your HSA funds for other purposes, including simply saving those funds for the future. The IRS sets a limit on how much you can contribute to this account each year. For 2024, the spending limit is $3,200.* Dependent Care FSA A Dependent Care FSA is a pre-tax benefit account used to pay for dependent care services, such as preschool, summer day camp, before or after school programs, and child or elder daycare. A Dependent Care FSA is a smart, simple way to save money while taking care of your loved ones so that you can continue to work. The IRS sets a limit on how much you can contribute to this account each year. For 2024, the spending limit is $5,000 if married and filing jointly or head of household or $2,500 if married and filing separately.* Here’s How an FSA Works 1. You decide the annual amount (up to the set limit for each account) you want to contribute to either or both FSAs based on your expected healthcare and/or dependent childcare/elder care expenses. 2. Elections are deducted from each paycheck before income and Social Security taxes, and deposited into your FSA. Your entire annual election is available immediately after the beginning of the plan year for the Health Care FSA and LPFSA. For the Dependent Care FSA you can only receive the amount that is in your account when your claim is paid. 3. For eligible healthcare expenses you can pay with the Healthcare FSA or LPFSA debit card or submit a claim form for reimbursement. For dependent care, you pay for eligible expenses when incurred, and then submit a reimbursement claim form or file the claim online. 4. You are reimbursed from your FSA, so you actually pay your expenses with tax-free dollars. 5. At the end of the calendar year, any unused amount in your Healthcare FSA will be forfeited with the exception of a maximum $640 rollover to be used for the next calendar year.* The $640 rollover does not apply to the Dependent Care FSA. *Subject to change pending the release of the 2025 annual contribution limits from the IRS.
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