Effective Start Date for New Policy:  August 1, 2024 (the start of the new FSA plan year). 

Dependent Care FSAs

The Law Center will contribute up to $5,000 per year (~$416 per month) to a dependent care Flexible Spending Account (dependent care FSA) for child/dependent care  for any staff member with a qualifying dependent. There are rules each plan  year for the Law Center’s FSA plans regarding the treatment of funds remaining in staff member’s FSA accounts after the close of that plan year.  So be sure to submit expenses as they are incurred during the plan year and more importantly, be sure to submit all of your eligible expenses at or before the end of each plan year.  Dependent Care FSAs often have a grace period allowing participants up to 90 days after the plan year ends to continue incurring services and using the funds contributed during the plan year.  After this  grace period runs out, the remaining funds in the dependent care FSA account will be forfeited back to the Law Center.

Eligible Dependent Care Expenses:

A dependent care spending account allows the employee to set aside before-tax dollars to pay for daycare expenses for children under the age of 13 or for adult day care for a disabled spouse or other disabled dependent. This policy is intended to track the dependent care expenses that are eligible according to the IRS rules about what constitutes eligible dependent care expenses, which may change from time to time. See IRS Publication 503. 

Eligible daycare expenses for eligible children include things like:

• Before-school and after-school care

• Expenses for preschool/nursery school

• Extended day programs

• Au pair services (amounts paid for the actual care of the dependent)

• Babysitter (in or out of the home)

• Nanny services (amounts paid for the actual care of the dependent)

• Summer day camp for your qualifying child under the age of 13

Medical FSAs (also known as Health Care FSAs)

The Law Center will contribute the maximum allowed by the IRS each year to a medical care Flexible Spending Account (medical FSA) for medical care for any staff member who elects to enroll in a medical FSA.  In 2024 the IRS will allow employers to contribute up to $500 into a medical FSA for any employee who contributes $500 or less into a medical FSA.  If an employee contributes more than $500 into a medical FSA, the employer can match the employee’s contribution dollar-for-dollar (but not exceed it) up to the IRS maximum.  So if a staff member elects to contribute $1,500 into a medical FSA in the 2024-2025 plan year, the Law Center will match that by contributing $1,500.  If a staff member elects to contribute from $0 to $500 to a medical FSA in the 2024-2025 plan year,  the Law Center will contribute $500.  The IRS Rules may change from year to year for the Law Center’s medical FSA plans regarding the maximum contribution amounts for employers and employees and the treatment of funds remaining in staff member’s FSA accounts after the close of that plan year.  So be sure to submit expenses as they are incurred during the plan year and more importantly, be sure to submit all of your eligible expenses at or before the end of each plan year, or any grace period that follows.  Any remaining funds in the Medical FSA accounts will be forfeited back to the Law Center.

Eligible Medical Expenses

Expenses are considered eligible for reimbursement from a medical spending account if the medical expenses include amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease and for treatments affecting any part or function of the body. The expenses must be primarily to alleviate or prevent a physical or mental defect or illness. Expenses solely for cosmetic reasons generally are not expenses for medical care.  Also, expenses that are merely beneficial to one's general health (for example, vitamins, health spas) are not expenses for medical care. But mental health and things like massage might be qualified expenses - but might need a letter of medical necessity - which doctors and chiropractors may give you.  Due to frequent updates to regulations governing benefits,  any list of eligible expenses may be outdated.  If you would like to confirm the eligibility of a specific item please call  the Law Center’s FSA provider.  In the 2023-2024 plan year, that provider is WEX and the phone number is 866-451-3399.

Common Eligible Medical Expenses

• Medical: Ambulance services, chiropractic adjustments, coinsurance, copays, hearing aids, laboratory fees, medical deductibles, medical services and expenses, orthopedic goods and prosthetics and prescription drugs.

• Dental: Cleanings, coinsurance, copays, crowns, deductibles, dental treatments, dentures, denture adhesives and cleaners, fillings and orthodontics.

• Vision: Contact lenses, contact solutions and cleaning products, eye drops, eye exams, prescription glasses and sunglasses, refractions, vision correction procedures (e.g., Lasik) and vision screenings.

• Preventive: Annual physicals, birth control, flu shots, immunizations, obesity and weight loss programs, prenatal visits, screenings (e.g., Life Line Screening), tobacco cessation programs and well child visits.

(AC)

Updated 4/23/25 to reflect new policy passed in May 2024.