Open Enrollment 2014: FSAs can provide tax-free help for qualified medical expenses

The information included in this email does not apply to conservation officers, excise officers, Indiana State Police plan participants, part-time employees or contract employees.


FSAs can provide tax-free help for qualified medical expenses

A Flexible Spending Account (FSA) provides another opportunity for you to better control your health care dollars. By tucking away pre-tax dollars from your paycheck, you have an account that’s dedicated for the reimbursement of qualified medical, vision and dental expenses. 

All FSAs offered by the state have a use-it-or-lose-it rule. Money left at the end of the plan year is not rolled over or reimbursed, so plan carefully.

You must re-enroll in a FSA each year. If you decide that an FSA is right for you and your family, it is important to be conservative when allocating the yearly amount.

Three types of FSAs: Medical Care, Limited Purpose and Dependent Care

Medical Care and Limited Purpose FSAs allow employees to use pre-tax dollars to cover health care costs for medical, dental, vision, hearing and other out-of-pocket expenses not paid by insurance.  

For 2014, the maximum annual contribution for the Medical Care and Limited Purpose FSAs is $2,500.

A Limited Purpose FSA may only be used for dental, vision and preventive care expenses until the minimum deductible of a CDHP is met ($1,250 for single and $2,500 for family, per federal regulations). Once the minimum deductible is met, the Limited Purpose FSA can be used as a Medical Care FSA.   

If you are enrolled in a CDHP/HSA, your FSA will automatically become a Limited Purpose FSA. You do not need to meet the minimum deductible to use the funds in your Limited Purpose FSA for dental and vision expenses. You can pay for dental and vision expenses from your Limited Purpose FSA at any point during the year.

Dependent Care FSAs are not front-loaded. Portions of your biweekly pay are put into a pre-tax account to help pay for eligible dependent care costs throughout the year. Currently, the maximum annual contribution amount for the Dependent Care FSA is $5,000 ($2,500 if married and filing separate tax returns).

Dependent care costs include most dependent care expenses for eligible children and adults. Dependent care expenses do not include medical expenses and therefore can be used even if you participate in a HSA.

The state’s FSA program is administered through Key Benefits Administrators. The administrative fee will remain at $2 biweekly. 

Get more information about your 2014 benefits

Before you make your selections for open enrollment, do your homework. Look at your health care costs over this past year so you will know what your expenses have been. Then review the information on the three plans available for 2014. Input that information into the Benefits Calculator and from there, make an informed, educated decision.

If you have further questions, attend one of the town hall meetings or webinars or talk to a Benefits Specialist.

2014 Open Enrollment website:


Benefits Hotline: 7:30 a.m. to 5 p.m. Monday through Friday, Eastern Standard Time 

  • 317-232-1167 within Indianapolis area
  • 1-877-248-0007 toll-free outside Indianapolis