Flexible Spending Accounts (FSAs) allow benefited county employees to set aside money, tax free, that can be used to pay for certain eligible expenses. Frederick County Government offers two types of FSAs: a Health Care FSA and a Dependent Care FSA. The Health Care FSA can be used to pay for certain out-of-pocket health care expenses for employees and their eligible dependents. The Dependent Care FSA can be used to pay for day care expenses for eligible dependents. The IRS determines which expenses are eligible and which are not. This benefit plan runs on a calendar year (January 1 - December 31).
For calendar year 2016 the contributions limits are:
Health Care FSA: $2,550
Dependent Care FSA: $5,000
New employees can enroll in the FSA plan within their first 30 days of employment. Other employees can enroll during open enrollment, which usually occurs in November each year. All enrollments expire at the end of each calendar year. During open enrollment, all benefited employees must decide if they want to participate in the FSA plan for the upcoming calendar year.
Under new IRS regulations, employees are now able to rollover up to $500 from one plan year into the next. This will allow participants an additional 12 months to spend the remaining balance. Funds that are rolled over will not affect election amounts for the new plan year. This applies only to Medical and Limited Purpose FSAs, not Dependent Care.