Health Care FSA
Health Care FSA
Shell Annual Enrollment Webinars:
Full Transcript:
Do you want to maximize your Shell benefits and pay less in taxes? Today we’re going to talk about the flexible spending account.
Within your shell benefits, you have access to two flexible spending accounts. There’s the dependent care FSA, which is used for childcare expenses. And there’s the health care FSA, which is used for health care expenses. Today we’re going to focus on the health care FSA.
To have access to the health care FSA. You have to be in a lower deductible health plan like the PPO.
Now, with an FSA, money comes out of your paycheck pre-tax and goes into a reimbursement account. When you have qualified expenses, you submit those for reimbursement and get that money out tax-free. So today, let’s talk about the benefit, the risk, and three important dates. First, let’s start with the benefit.
The maximum you can put into this upcoming FSA is $3,050. The benefit is based on your tax rate. So we’re going to assume, for this example, that you’re in the 35% tax bracket and you’re also paying the Medicare surcharge. Now, in addition, your state tax rate would also apply here. So when you sum all of this up, your benefit can be greater than $1,100 dollars.
Now, let’s talk about the risk. With an FSA, it is a use it or lose it account. So you do not want to over-fund this account. Now, the list of things that can be submitted for reimbursement is quite extensive. So in addition to health care expenses, you can also do over-the-counter medication and prescription medication, as well as dental and vision expenses. So it’s pretty easy to get a $3,050 limit, especially if you have a family. But it’s still important to be cautious that you don’t overfund it.
And lastly, let’s talk about three important dates. First, is this upcoming annual enrollment. You must set up your FSA each year and update the amount that you want to contribute. Once it has set an annual enrollment, you cannot change it throughout the year without a qualifying life event. Next is the calendar end of next year. So for your 2024 FSA, all expenses that you’re going to use for reimbursement must be done during the 2024 calendar year. And the last date that’s important is March 31st of the following year, so 2025. This is the last date that you can submit for reimbursement for expenses that happened during the 2024 calendar year.
If you have questions on FSAs or other Shell benefits, I encourage you to enroll in my webinar coming up and annual enrollment.
