Flexible Spending (FSA)
There are three types of Flexible Spending Accounts (FSA’s) available to you: Healthcare FSA (medical, dental, vision, pharmacy, and other related expenses), Dependent Care (primarily dependent day care expenses), and Limited Purpose FSA (dental and vision expenses only). All three accounts allow you to pay for out-of-pocket costs with pre-tax dollars. Because you do not receive the amount of your FSA contributions in your paycheck, you do not pay income tax on this money. Plus, the reimbursements are tax-free.
Remember to carefully estimate your plan year expenses when making an election. You must use all of the funds in your account by the end of the plan year or the money is forfeited per the IRS regulations.
The FSA plan year is January 1 through December 31.
2026 Plan Year Maximums
Healthcare FSA: $3,400
Dependent Care FSA: $7,500
If you are enrolled in the HSA Medical Plan, you also have the option to enroll in a Health Savings Account (HSA), which can also be used for medical, dental, vision, pharmacy, and other related expenses. A Limited Purpose Healthcare FSA is available for HSA plan participants. Limited Purpose FSAs are for dental and vision expenses only.
Healthcare FSA
You can contribute up to $3,400 during 2026 into a Healthcare FSA. Eligible Healthcare FSA expenses include deductibles, copays, coinsurance, prescription drugs, over-the-counter drugs (no prescription required), dental, and vision expenses.
The Healthcare FSA is only available to employees who elect the PPO 3000 plan.
Limited Purpose FSA - HSA Plan Members
A Limited Purpose FSA is a healthcare spending account that can only be used for eligible vision and dental expenses. This account is only available to employees who select the HSA 5500 Plan.
Dependent Care FSA
The Dependent Care FSA enables you to pay for certain dependent care expenses using before-tax dollars. You may contribute up to $7,500 in a Dependent Care FSA.
Eligible Dependent Care FSA expenses include before and after-school programs, licensed daycare centers, nursery school or preschool, summer day camps, transportation to and from eligible care, an adult-day-care center, or elder care (in your own home or someone else’s). You can elect a Dependent Care FSA even if you have declined health coverage
Eligible childcare providers can be individuals, such as a family member or friend. However, it's important to note that this category excludes individuals under the age of 19 who are related to you, including your own child or stepchild. Additionally, the caregiver cannot be someone whom you list as a dependent on your federal tax return.
To claim reimbursements for dependent care through this FSA, you must ensure that the service provider has either a federal tax ID number or a valid social security number. This documentation is essential to facilitate the reimbursement process.
Eligible Expenses Must Be for the Care of:
- A dependent child who is under age 13 and whom you claim as an exemption on your tax return
- A dependent child, elderly parent, or relative who is physically or mentally incapable of caring for himself or herself
Important Note: Expenses are only tax-deductible if both parents are working, actively looking for work, a full-time student, or disabled.
Debit Cards & Manual Claims
HCFSA and LPFSA participants receive a debit card which allows for expenses to be paid at the time of service, eliminating the reimbursement process. The funds are debited from the account and paid to the provider’s office or pharmacy.
Manual Claims
Not all vendors accept the debit card. Should you need to pay for an eligible expense and be reimbursed from your FSA, you will need to submit a claim to the address indicated on the claim form with appropriate documentation.
Dependent Care FSA reimbursement is done via a claim form. Contact CDS for additional details.
Use It or Lose It
Claims must be incurred by December 31, 2026, to be eligible for reimbursement for 2026. Dahmes will permit you to roll over up to $680 of unspent FSA funds in your account to the next year. Any remaining balance over $680 is retained by your employer and forfeited by you.
IRS regulations require appropriate documentation to ensure your claims are valid expenses. You will be asked to provide receipts as documentation for most expenses. Retain receipts and provide them promptly upon request.
