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Flexible Spending Accounts Video - YouTube
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welcome my name is Lindsay and I am from
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the office of total rewards in this
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video we will review the three flexible
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spending accounts or FSA's that the
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University of Rochester offers to
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eligible employees a health care FSA is
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a tax advantaged savings account that
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allows you to set aside money for
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eligible expenses on a pre-tax basis you
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would pay out of pocket at the point of
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service and get reimbursed for the cost
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of your qualified medical prescription
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vision and dental expenses to elect an
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FSA you must be actively employed in a
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benefit eligible position at the
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University unlike a health savings
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account you do not need to have medical
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coverage through the University to have
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an FSA your annual FSA election in 2020
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cannot exceed the IRS maximum of two
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thousand seven hundred dollars per year
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and if you are married and file taxes
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jointly you and your spouse can each
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have an FSA but the combined total
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cannot exceed that max of two thousand
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dollars two thousand seven hundred
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dollars eligible dependents that you can
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use your FSA on include your spouse and
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your qualified tax dependents even if
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they are not covered under your health
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care plan you can elect an FSA either
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during the annual open enrollment period
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within 30 days of your higher date or
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the date you become a newly benefit
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eligible employee or within 60 days of a
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corresponding qualifying event when you
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elect an FSA you choose the total amount
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you want to contribute for the calendar
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year however your election must be
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between $100 minimum and the IRS maximum
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of 2,700 your annual election will be
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prorated based on the number of pay
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periods remaining in the calendar year
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and will be deducted pre-tax from your
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paycheck
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period once your FSA is effective you
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can reimburse yourself for qualified
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expenses incurred while your FSA is open
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effective dates would be January 1st if
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you elect an FSA as part of the open
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enrollment period or the first day of
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the month that your health plan election
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begins or the first day of the pay
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period after your election is processed
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new for 2020 is the FSA carryover rule
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which states that employees are only
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eligible to roll over FSA funds from one
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year to the next and this has a max of
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$500 if they elect to contribute to
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their FSA during open enrollment and we
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will go into further details on this in
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a future slide as you are making your
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decision if an FSA is right for you
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there are three main benefits starting
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on the effective date of your FSA you
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have access to your full annual election
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your contribution is a pre tax payroll
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deduction and the reimbursements you
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receive for qualified medical expenses
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are also tax-free so you save on taxes
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through your contributions as well as
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your distributions so as an example if
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you elect to contribute $500 to your FSA
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for 2020 during the open enrollment
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period on January 1st 2020 you will have
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access to your full $500 election if you
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buy prescription glasses for $200 on
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January 2nd you would pay out of pocket
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at the store and can submit a
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reimbursement request that same day you
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can receive your full $200 reimbursement
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for the cost of the glasses in January
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even though you have not yet contributed
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funds to your FSA as you will see in the
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example your FSA contribution in your
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first payroll is still determined by
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dividing
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total FSA annual election by the number
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of pay periods remaining in the year so
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how can you use your health care FSA
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funds medical pharmacy and dental claims
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that are processed through your
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university health or dental plans will
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be automatically reimbursed unless you
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opt out of the automatic reimbursement
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feature and in that case you would
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choose which claims you'd like to
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manually submit for reimbursement
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please note depending on your
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third-party administrator Aetna or
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Excellus there may be restrictions for
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the automatic reimbursement feature we
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suggest we suggest that you contact your
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FSA administrator with these questions
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your administrator is lifetime benefit
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solutions for Excellus members or if you
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do not elect university health coverage
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you'll also go through lifetime benefits
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solutions and then if you are through
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Aetna your FSA administrator is payflex
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you can set up direct deposit so your
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reimbursements are deposited directly
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into your personal banking account
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otherwise you would receive a check for
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your qualified medical expenses if you
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or your eligible dependents have
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qualified medical expenses that are not
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covered under the university health or
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dental plans or you opt out of the
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automatic reimbursements you can submit
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claims using your online account with
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your vendor your vendors app or through
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a form and all forms can be found on our
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total rewards website and as previously
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mentioned your FSA can be used to
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reimburse qualified medical expenses for
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yourself spouse or domestic partner and
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tax dependent children up to age 26
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qualified expense is a term we have used
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a few times in this video and there are
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a couple things to know about what that
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means first qualified expenses are
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designated and governed by the IRS and
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the list below gives an abbreviated list
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not all of the expenses that you can use
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your FSA for the full list can be
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by looking at publication 502 and this
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is also available on the total rewards
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website to use your FSA for a qualified
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medical expense for yourself your spouse
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your domestic partner or your qualified
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tax dependent child the expense must be
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incurred after the effective date of the
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HSA so if you are a new hire and your
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benefits are effective the first of the
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following month
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that means any expense as of that date
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would be eligible to use your FSA
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towards you can only contribute to a
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limited purpose FSA if you're also
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contributing to a health savings account
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and are covered under the your HSA
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eligible plan a limited purpose FSA can
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be used to pay for qualified vision or
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dental expenses until you meet your
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deductible on the HSA eligible plan
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after you meet your deductible you can
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use your limited purpose FSA to
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reimburse yourself for any qualified
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medical expenses incurred after the
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deductible was met you have immediate
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access to your full annual election as
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of the effective date of your account so
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this means you don't have to wait until
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you've contributed the funds through
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pretext payroll deductions just like the
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normal FSA works and the IRS annual FSA
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maximum election for 2020 is $2,700 per
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calendar year and this maximum applies
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to the health care FSA as well as the
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limited purpose FSA please note limited
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purpose FSA claims do not qualify for
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automatic reimbursement this means you
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need to submit your claim using your
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online account your vendors app or by
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using a form that can be found on the
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total rewards website the dependent care
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FSA is available regardless of your
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health care plan choice it is an option
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to allow you to pay for a portion of
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your eligible day care expenses with
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pre-tax dollars generally the dependent
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care FSA can reimburse day care expenses
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for dependent children under age 13 and
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pendant adults claimed as a tax
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dependent but it is always good to check
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with your FSA vendor to confirm that
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your expenses will be eligible
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furthermore the total rewards website
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has IRS Publication 503 which lists all
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eligible dependent care expenses the
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annual contribution maximum for 2020 is
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$5,000 per family per year and there is
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no rollover with this benefit and the
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unused funds will be forfeited at the
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end of the year the last thing to know
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is that dependent care FSA funds build
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up over time like HSAs
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and are different than health care and
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limited purpose FSA's that give you
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access to your full election as of your
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effective date so the money available to
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you in your dependent dependent care FSA
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depends on the money that you put in the
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account through your paycheck deductions
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as previously mentioned there is new
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eligibility associated with your FSA
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rollover as of 2020 the IRS maximum that
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employees are allowed to rollover from
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one year one plan year to the next is
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$500 and this applies to health care
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FSA's and limited purpose FSA's to be
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eligible to rollover health care or
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limited purpose FSA funds $500 or less
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from one year to the next employees must
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elect to contribute to either FSA during
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open enrollment this change for 2020 and
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this is important to note is that you
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must elect to contribute during open
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enrollment for the upcoming year to
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receive rollover funds as you look at
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the examples employees are allowed to
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rollover from their health care FSA to
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their health care FSA in the next year
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or from their limited purpose to their
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limited purpose as well as from a health
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care FSA to a limited purpose FSA and
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vice versa so to recap
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these new rules you must elect to
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contribute during open enrollment this
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applies to health care FSA's and limited
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purpose FSA's as dependent care is not
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eligible for rollover for IRS guidelines
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and regardless of if you are eligible to
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rollover or not all FSA's have until
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April 30th of the following plan year to
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submit claims for the previous year
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so any 2019 claims have until April 30th
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2020 for the claim to be submitted to
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the FSA vendor so as we get to our last
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slide this is just a reminder of all
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your FSA resources you can visit your
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FSA vendors website to view your account
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balance and claim history submit a claim
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for reimbursement enroll in direct
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deposit and view upcoming payments for
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claims submitted for additional
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information regarding IRS rules and
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regulations pertaining to flexible
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spending accounts we would have you view
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IRS Publication 502 and our 503 and our
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total rewards website can also be a
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great resource additionally we have
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vendor information etna members work
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with payflex Excellus members for
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employees who do not elect university
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healthcare work with lifetime benefits
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solutions
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