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Flexible Spending Accounts (FSAs) allow you to set money aside on a pre-tax basis to pay for eligible expenses. NEXCOM offers two FSAs:
- Health Care Flexible Spending Account (HFSA) is used for eligible health care expenses. These include medical, prescription drug, dental and vision care expenses.
- Dependent Care Flexible Spending Account (DFSA) is used for eligible dependent care expenses. These include expenses for child (under age 13) or adult day care, pre-school and after-school programs. This account must be funded prior to filing for reimbursement claims.
Regular full-time and regular part-time associates may enroll in the HFSA and/or DFSA during the annual open enrollment period in November of each year for the upcoming year. You must then re-enroll each year if you wish to continue participating in the FSA(s). Newly hired or newly eligible associates may enroll in current year FSA Plans with 30 days of attaining eligibility. Changes and enrollment in current year FSA Plans are not permitted after September 30 of the current year.
When you enroll in an FSA, you choose how much money you want to set aside for the upcoming year. This will be deducted from your pay before taxes are withheld — reducing your taxable income and what you pay in taxes!
HFSAs:
- Minimum Annual Contribution = $200*
- Maximum Annual Contribution =$3,200*
- The full amount of your annual contribution election amount is available on the first day of the Plan year (1 January)
DFSAs
- Minimum Annual Contribution = $200*
- Maximum Annual Contribution =$5,000*
- Contributions must be in your DFSA before you can be reimbursed for your eligible expenses
*Contributions are taken from biweekly pay in equal amounts throughout the year until you reach the annual to the amount you elect.
Health Care FSA participants will receive a debit card “loaded” with the full amount you set aside for the current plan year. The debit card works just like a credit card to pay for authorized expenses. However, some expenses paid with the debit card will require you to submit receipts to the FSA vendor to verify that the purchase was for an authorized FSA expense. These funds become available as of 01 January. Save your receipts!
You may carry over up to $640 of unused HFSA contributions into the next plan year. This money will be available for eligible health care expenses in addition to your regular contributions. Any amounts remaining in your HFSA exceeding $640 will be forfeited.
The $640 carryover rule does not apply to DFSA. Therefore, the grace period provision will remain in effect for the DFSA. Amounts remaining in your DFSA at the end of the plan year grace period (March 15th of the following calendar year) will be forfeited.
When you're an associate living in the continental US (CONUS) enrolled in the High Deductible Health Plan (HDHP) you are eligible for a Health Savings Account (HSA). The HSA helps you meet the deductible and pay your share of qualified medical expenses. You may use this account for eligible health care expenses, or let it grow for future expenses, even those into retirement.
Once you enroll in an HSA, the DoD NAF will contribute $500 (for employee only coverage) or $1,000 (for family coverage) to this account at the beginning of the year following your enrollment. This contribution will be deposited into your account once you elect the HDHP and your HSA is open. You may contribute to the account as well! Just like with the FSAs, associates can choose to have pre-tax funds deposited to their HSA from their paychecks.
- HSA contributions go into a bank account owned by you, the employee (or pre-65 retiree), so there is no “lose it or use it" rule.
- The HSA allows higher pre-tax contributions for eligible expenses than a Flexible Spending Account (FSA).
- HSA monies stay with you even if you switch plans or no longer work at your NAF employer — regardless of whether you leave or retire.
- Once your account reaches $1,000, you can choose to invest the funds.
- If you are 65 or older or disabled, you may use the HSA monies for non-eligible expenses without the 20% tax penalty. “Regular” taxes will apply to the withdrawal amount.
- If you have an HSA already, you may transfer the balance to this HSA.
- Payflex, the HSA administrator, offers many online tools and resources that make it convenient to manage your account.
- You cannot have both an FSA and an HSA; it's one or the other.
Associates outside of the continental US (OCONUS) enrolled in the Aetna International HDHP are eligible to have a Health Reimbursement Account (HRA). Associates with an HRA cannot make contributions, but NEXCOM will contribute $500 per year for Single coverage and $1,000 per year for all other tiers.
