December 10 is the last day for federal employees to weigh health plan options during Open Season and elect or change coverage in the FEHB and FEDVIP programs and to enroll for 2013 in the flexible spending account program.
Registered employee benefits consultant Ed Zurndorfer advises employees not to overlook flexible spending accounts.
“What employees have to keep in mind is as they’re choosing their health care plan for 2013, there is no health insurance plan out there that’s going to pay for everything. Employees invariably are going to be paying something out of pocket…” Zurndorfer said in a recent interview.
Flexible spending accounts are usually the best way to pay for these out-of-pocket costs. These accounts are comprised of pre-tax dollars taken out of feds’ salaries. Federal employees can open two types of flexible spending accounts: One for dependent childcare and/or adult day care, and one for health care spending.
There are some changes to the flexible spending accounts that are noteworthy:
New account limits
The Affordable Care Act lowered the limit for health care flexible spending accounts to $2,500 starting Jan. 1, 2013. The previous limit was $5,000.
The limit for dependent care accounts remains $5,000.
No over-the-counter medications
Previously, federal employees could use their flexible spending accounts to pay for over-the- counter medications. Starting Jan. 1, 2013, they can only use their accounts for prescription drugs.
Use it or lose it
For flexible spending accounts in 2013, employees do not have to use all their funds by Dec. 31, 2013. The deadline to use 2013 funds has been extended to March 13, 2014.