Making the Most of Your Flexible Spending Accounts
Flexible spending accounts help you to save money on your eligible health care and dependent care expenses. That's because the money you contribute to these funds is deducted from your pay before taxes. And, when you file a claim for reimbursement, the money repaid to you is also not taxable.
Types of Accounts
Alcoa offers two flexible spending accounts:
- The Health Care Fund flexible spending account: Use it to pay for health care expenses for you and your dependents
- The Dependent Care Fund flexible spending account: Use it to pay for day care expenses for dependents under age 13 or adult day care. Note: This fund cannot be used to pay for a dependent's medical costs.
How These Accounts Work
When you enroll in your Alcoa benefits, you choose how much to contribute to the accounts on a pay-period basis, up to the maximum allowed for the year.
- Your contribution is taken from your pay pre-tax.
- When you use a health care service or have spent money on dependent care, you can file a claim for reimbursement from your account. For the Health Care Fund, you may also use the Your Spending Account™ card to pay for eligible expenses without using your own money. See Tips for Using Your Spending Account Card.
Examples of how you can save
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Before You Enroll
Be sure to carefully estimate what your expenses will be during the year. This is important because:
- If you contribute more to the accounts than you claim in expenses during the year, you forfeit the leftover money in your accounts, per IRS rules. This is often referred to as "use it or lose it."
- You can't change your contribution amount during the year unless you have a qualified change in status (for example, you get married or have a child) that allows you to do so.
- You can't use extra funds in your Health Care Fund for a shortfall in your Dependent Care Fund, or vice versa.
- You must incur expenses this year to be reimbursed from this year's account.
Changes to Claims Process
Due to federal regulations, these changes have been made to the claims submission process for the Health Care Fund and Dependent Care Fund:
- Handwritten or verbal information from employees or covered dependents cannot be accepted to verify a claim.
- A statement of medical necessity from your health care provider will be required for items that serve more than one purpose, such as vitamins, herbal remedies, nutritional supplements, and massage therapy. For the claim to be approved, the statement of medical necessity must:
- Be written on a prescription or a doctor's letterhead
- Be signed or stamped by the doctor
- Be dated in 2010
- Include the patient's name
- Specify a diagnosis
- Include the specific name of the prescribed item or service
- Include length of treatment or use
- Include this specific language, written by the doctor: "I am not prescribing this item/service for cosmetic or general health purposes. It is medically necessary."
- Canceled checks or online bank statements won’t be accepted as proof of a claim. You will need to submit an itemized bill that includes the date of service, recipient, description of service, provider, and amount paid.
- Dependent care claims will be reimbursed through the date the claim is being processed, even if an itemized bill for the entire month is submitted. For the claim to be approved in full, all service dates must have been completed already. For example, if you submit a dependent care claim on April 15 for dates of service ranging from April 1 through April 30, and the documentation includes the actual dates of service and the dollar amount for each day, only the daily charges through April 15 will be processed.
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Use it or lose it
Don’t forget: You must use all of the funds in your flexible spending account by December 31. These accounts do not roll over from year to year so you will forfeit any balance remaining on January 1.
Also, you need to submit claims for eligible expenses incurred during 2009 no later than March 31, 2010.
Want tips on using Your Spending Account™ card?
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