Flexible Spending Accounts - 2018
Important Update: Your Flexible Account with Highmark Blue Shield
Penn State is making a change to the administration of Healthcare and Dependent Care Flexible Spending Accounts (FSA) effective January 1, 2018. Administration of these benefits will change to HealthEquity.
This change brings several enhancements, including online access to a member portal and member service specialists who are available 24/7 to answer your questions.
Here is some important information regarding the change over from Highmark Blue Shield to HealthEquity for the beginning of 2018:
- Flexible Spending Account (FSA) Medical – $500 Carryover Allowance & Run-out for submitting 2017 claims. PSU requested Highmark administer the FSA through the run-out period from 1/1/18-3/31/18. In md-April, Highmark will provide a spreadsheet of ending FSA balances to Health Equity so they can process carryover for eligible members.
- Dependent Care Account (DCARE) – PSU requested Highmark administer the DCARE through the run-out period from 1/1/18-3/31/18. Remaining DCARE funds do not carryover.
Health Care FSA Features
- Funds may be used to pay for out-of-pocket medical, dental, and vision care expenses for the employee or eligible dependents who are on the employee's plan.
- The FSA acts like an up-front loan: entire elected amount is available at the start of the new year.
- The employee does not have to be enrolled in a Penn State health plan in order to be eligible for a health care FSA.
- For 2018, the maximum allowable contribution to a health care FSA is $2,600.
If two Penn State employees are married and have elected Family coverage under the PPO Savings Plan with an HSA, a Health care FSA cannot be opened under either employee's name. The IRS does not permit use of a health care FSA when enrolled in an HSA. The Dependent Care FSA, however, is available to either employee.
Dependent Care Flexible Spending Account Features
- Allows employees to set aside pretax funds to reimburse work-related day care expenses for eligible dependents.
- Funds must be in the dependent care FSA before they may be used.
- Money contributed to the dependent day care FSA is subject to Pennsylvania state income tax.
- For 2018, the maximum allowable contribution to a dependent child care FSA is $5,000.
Health Care Flexible Spending Account
If you elect the PPO Plan, you have the option to enroll in a Health Care Flexible Spending Account (FSA), managed through HealthEquity. Like the Health Savings Account (HSA), contributions made to the Health Care Flexible Spending Account are tax-free. However, unlike the HSA, funds contributed must be used in the same plan year for eligible health care expenses. For 2018, the contribution limit has been increased to the IRS limit of $2,600. This election must be made during benefits open enrollment and cannot be changed, unless of a life-qualifying event. For those who elect a Health Care FSA, there is a carry over provision of up to $500.
Dependent Care Flexible Spending Account
Regardless of which health plan you choose, you can elect a Dependent Care FSA. This account is used to reimburse you for dependent care expenses, such as child day care, elder care, etc. The contribution limits for 2018 are:
- $5,000 per year per household
- $2,500 for married individuals filing a separate tax return
Changes to your Account
Updates may be made to either flexible spending account when you experience a Qualifying Life Event change such as: marriage, birth, adoption, etc. To do so, please visit Workday via the WorkLion portal.