The IRS has strict rules using a flexible spending account plan:
- Flexible spending plans are a great way to s-t-r-e-t-c-h your paycheck and save on the cost of unreimbursed medical, dental and child or eldercare expenses for you and your family. So… anticipate your expenses carefully to avoid leaving money in your account.
- Dependent children who are in daycare, after school care or day camps must be under the age of thirteen (13).
- In order to participate in a Dependent Care program, parent(s) must be gainfully employed, seeking gainful employment or be full time students.
- Expenses submitted for claim reimbursement must be incurred during the plan year.
Please read these guidelines carefully to learn how to take full advantage of a flexible spending plan. Feel free to call ABS or your benefits point person should you have any questions!
Save all your receipts in one place, perhaps in a file or envelope to help you stay organized throughout the plan year.
Receipts must show:
- Name and address of the service provider
- Date service/expense was incurred
- Name of person for whom service/expense was provided
- Detailed description of the service/expense provided
- Amount charged for the service
The IRS does not consider credit card receipts, cancelled checks or balance forward statements as acceptable forms of receipts. For over-the-counter (OTC) items; include a doctor’s note and clarify the specific item or include a photocopy of the package.
Examples of receipts include:
- Doctor office co-payments
- Receipts from daycare or qualified eldercare facilities or copies of receipts you pay to in-home providers
- Explanation of Benefit (EOB) statements from your insurance provider which shows the amount or percentage of a medical or dental charge your insurance company paid and how much you owe (i.e. deductibles, co-insurance payments, out of pocket expenses, etc.)
- Orthodontia, a copy of the contract
Receipts are required to verify that you are spending money from your account on qualified expenses. You can submit your receipts once or as often as you like. However, processing of reimbursement checks require a minimum of $20.00 of receipts. You may access your personal account online or call ABS to confirm account balances.
ABS is committed to sending your reimbursement checks quickly. We process payments weekly after receiving your signed Reimbursement Request form and receipts.
When you enrolled, you told the IRS you were reducing your taxable salary by a specific amount for the flexible spending plan year. According to the IRS, you will forfeit any unspent money. HOWEVER, your company does not want you to lose this money! It is up to you to plan wisely and when you enroll, ask questions. ABS and your employer benefits point person are more than willing to help you make the most of this benefit work for you!
When estimating how much you, your spouse and dependants will have in medical and dental expenses, think about your past expenses. Avoid thinking about the “worst case scenario” because you cannot predict those kind of extra expenses (and hopefully you will not have them!) Avoid overestimating. It’s easy to save money with this benefit as long as you plan properly.
- The birth or adoption of a child
- Marriage, divorce or legal separation
- Spouse employment changes
Flexible spending plans work on a 12-month “plan year”. The dates depend upon how your company has set up the benefit period, therefore it MAY NOT always be January 1–December 31. The plan year is renewed every 12 months. At this time, you may change, sign up or waive participation.
This must be done before the new plan year starts. Just like medical and dental benefits, your company must document that you are aware of this benefit and that you have elected to sign up or waive it.
You have 60 days after you leave the company to submit your receipts to ABS for reimbursement. Expenses will only be reimbursed for services incurred prior to the date of termination. (See your benefits department to discuss possible COBRA options.)
Call ABS at any time with questions.
ABS Flexible Spending Account Consultants are ready to answer all of your questions. Simply call (877) 732-8125.