A Flexible Spending account can be used for both health expenses and dependent care expenses that are incurred during the plan year (July 1‑June 30).
Employees may allocate a portion of monthly earnings, pre-tax, to be used for health expenses and dependent care expenses, which can result in substantial tax savings. This amount is locked in for the plan year.
USU Eastern and USU Blanding participate in the PEHP FLEX$. There are two different FLEX$ accounts – one for medical expenses and another to help with dependent childcare costs – and each has important rules to keep in mind when using the benefit.
- The maximum you may set aside for health expenses is $2,750 per year.
- The maximum you may set aside for dependent care is $5,000 per year.
Paying for medical expenses through the Flex Spending Plan can save you as much as 25%-28% in taxes on each dollar spent for your share of insurance deductibles, co-pays, or items not covered by insurance. Also, the Dependent Care Flexible Spending Account may save you more in taxes than the day-care tax credit (filed with your federal income tax return).
This is a use or lose benefit.