Lloyd D. Watnik Government Benefits Consulting
November 2009
Vol 1, Issue 10
"It's YOUR Retirement!
Stay informed."
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Flexible Spending Account (FSA)
Our topic this month is the Flexible Spending Account (FSA). This program is only available to current employees. It is a tax saving benefit. In many cases, thousands of dollars can be saved each year. The savings will help employees contribute to the Thrift Savings Plan (TSP).

Please forward this to your friends and family as an informative tool for retirement planning.

Lloyd D. Watnik


Join me in San Diego next week
November 9, 2009
for CSRS/FERS training.

Learn how the 2010 changes
will affect your retirement!
Call (619) 906-9483 to register!

Two Types of FSA
There are two types of FSAs available to employees:
  1. A Health Care FSA (HCFSA), through which employees can use pre-tax allotments to pay for certain health care expenses that are not reimbursed by any other source and not claimed on the participant's income tax return. The annual maximum amount for reimbursement is $5,000.

  2. A Dependent Care FSA (DCFSA), through which employees may use pre-tax allotments to pay for eligible dependent care expenses up to a maximum annual reimbursement of $5,000 ($2,500 if the employee is married and filing a separate income tax return).
An employee can enroll in either or both.
Employees eligible for FEHB (even if not currently enrolled) can elect a healthcare FSA to cover expenses not covered under their FEHB plan - deductibles, coinsurance and copayments, as well as services not generally covered such as dental care, etc.

All Federal employees (including employees with temporary, seasonal and intermittent appointments) will be able to elect to participate in the dependent care FSA for eligible dependents.

Re-employed Annuitants who are eligible for FEHB (even if not currently enrolled) may enroll within 60 days of becoming reemployed.

New or newly eligible employees that do not have an opportunity to elect coverage during an open enrollment may elect to participate immediately upon entry into duty.
Open Season
The Federal Flexible Spending Account Program (FSAFEDS) Open Season coincides with FEHB Open Season:

Open Season:   11/9/2009 to 12/14/2009
Effective Date:   01/01/2010

This is the only time Federal Employees may enroll in the FSAFEDS Program, outside of a Qualifying Life Event (QLE). The benefit elections are irrevocable once the plan year has begun, unless the employee experiences a qualified status change.

Unlike Federal Employee Health Benefits enrollments, FSAFEDS enrollments do not carry over from year to year. Employees wishing to enroll in FSAFEDS must make a positive enrollment during open season, even if you are currently enrolled in the program.
Dental & Vision
The FSA used to pay for eligible health care expenses not covered by the FEHB Program, the new Federal Employees Dental and Vision Insurance Program, or any other insurance.

Expenses such as co-payments, co-insurance, deductibles, over-the-counter medicines, medical supplies, prescription drugs, vision and dental care, even shipping and handling charges for mail-order prescriptions and eligible over-the-counter items are covered.
Dependent Care
A Dependent Care FSA is used to pay for childcare and/or adult dependent care expenses that are necessary to allow you and your spouse (if married) to work, look for work or attend school full-time.
THE CATCH is that the money must be spent between January 1, 2010 and March 15, 2011.

Any balance remaining after the cutoff date is lost to the employee. This seems to scare many employees. It shouldn't! The money is easy to spend. If there is a balance near the end of the spending period, items such as prescription sun glasses and lasik surgery can be used. It is easy to get reimbursed; instructions are at the web site for enrollment (www.fsafeds.com).

Most FEHB plans will automatically bill FSA for your copayments and deductibles. Many drug stores, such as Walgreens and CVS, will bill FSA for you. The bill does not have to be paid to get reimbursement (with the exception of child care).
The web site has an excellent calculator that will tell you how much you can save by using FSA. Please consider this tax saving option.
More To Come!
NEXT MONTH: Changes for 2010 to the retirement systems!

Join me in San Diego next week
November 9, 2009
for CSRS/FERS training.

Learn how the 2010 changes
will affect your retirement!
Call (619) 906-9483 to register!

We have been told that other seminar companies and Federal newsletters do point out "the good deals." We choose not to for several reasons. The most important reason is that our background and resources are in Federal retirement benefits. We are not life insurance, health insurance or mutual fund representatives and we refuse to take referral fees of any kind.

We, too, have noticed what appear to be recommendations in Federal e-mail and hard copy publications on all these issues. In many cases, they even give you an application or an 800 number in the publication or web site.  We have been told that fees are paid and, in fact, the article was written, by the offering party. BE CAREFUL!!!   Do your homework.

We sell nothing other than our course. We do not accept referral fees. Our goal is to help Federal Employees have a successful retirement. We allow our students to call us about Federal benefits any time after taking the course without charge.

Next month we will discuss Federal Employee Health Benefits.
Thank you for reading!
 Lloyd D. Watnik Government Benefits Consulting

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