Flexible Spending Accounts
Health Care Spending Account

Chances are you have at least some out-of-pocket health care expenses each year such as deductibles, copayments and other expenses, which are not covered by any benefit plan. If this is the case, you may want to consider the Health Care Spending Account.

With a Health Care Spending Account, you can set aside from $50 to $3,000 annually on a pre-tax basis to help pay for eligible out-of-pocket medical, dental, and vision expenses. (To be eligible, the expense must at minimum qualify as a medical deduction on your federal income tax return.) The amount you choose should be based upon anticipated out-of-pocket health care expenses for you and your dependents. Once an eligible service is performed, complete an Expense Reimbursement Request Form, attach your receipt or explanation of benefits, and mail to the plan administrator.

Medical expenses reimbursed through the account cannot also be claimed as a deduction for income tax purposes.

For more information about eligible expenses, please consult IRS Publication 502, "Medical and Dental Expenses" under the headings "What Medical Expenses Are Includible?" and "What Expenses Are Not Includible?" for details regarding what are and are not eligible expenses. But use caution when referring to IRS Publication 502, because it is meant only to help taxpayers determine their tax deductions, not describe the expenses that are reimbursable under a health care flexible spending account. For example, the publication states that you may get a deduction for expenses paid during the year. For purposes of your Health Care Spending Account, you may be reimbursed for expenses you incur during the year - no matter when you pay for them. (Expenses are incurred on the date you receive the healthcare services, that is, the date you see the doctor or other healthcare provider.) As another example, health insurance premiums, long-term care contracts and long-term care services are listed as deductible expenses in the publication; however, they generally are not reimbursable from your Health Care Spending Account. IRS Publication 502 is available from your nearest IRS office or by calling the IRS at 1-800-829-3676. You also may obtain a copy online by accessing http://www.irs.gov. If you have any questions regarding the eligibility of an expense, call ASI at 1-800-659-3035.

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