About the Flex Spending Account (FSA)

What is the Flex Spending Account?
The Flex Spending Account (FSA) is a valuable benefit available to NYS employees that helps you save money by allowing you to pay for eligible expenses—such as health care, dependent care, or adoption-related costs—with pre-tax dollars. By reducing your taxable income, you take home more of your paycheck. It’s a simple and effective way to get more out of your benefits and keep more money in your pocket! 

The FSA offers three negotiated benefits to State employees:

• Health Care Spending Account (HCSA) allows you to pay any amount from $100 to $3,400 for health-related expenses provided to you, your spouse, or eligible dependents with tax-free dollars. Funds are available at the start of the plan year.
• Dependent Care Advantage Account (DCAA) allows you to pay for up to $7,500 custodial care for a dependent care expense with tax-fee dollars while you are at work. Funds become available for reimbursement as they are deposited from your payroll deductions.
• Adoption Advantage Account (Adoption) allows you to pay up to $17,670 for adoption-related expenses of an eligible child with tax-free dollars. This account can help pay for a qualified adoption.

FSA Program Cost
Employees do not pay any fees to participate in the FSA. The FSA program is funded by the Office of Employee Relations, in partnership with state public employee unions. The Legislature and Unified Court System also contribute on behalf of their employees.

FSA Administration
The FSA is administered in compliance with Sections 125 and 129 of the Internal Revenue Code. The State of New York retains the services of an FSA administrator, Total Administrative Services Corporation (TASC).

When Does Coverage End?
If you leave the payroll due to termination, leave without pay, or any other reason, your HCSA coverage will end. Your last day to incur an HCSA expense is the last day of the month in which you left payroll.
If you have a question about your situation, contact the FSA administrator at 800-358-7202.

During the open enrollment period, think ahead and estimate what you expect to spend on
qualified expenses for the upcoming plan year. You can choose to enroll in one, two, or all three FSA benefit options. If you enroll in more than one FSA benefit, funds cannot be transferred between accounts. Next, decide how much of your salary you want to contribute to each account. This amount
is called your annual election, and it will be deducted from your paycheck before taxes are applied.
Please Note: per IRS regulations, pre-tax deductions are non-refundable.

Paycheck Deductions
If enrolling in the FSA during Open Enrollment, your annual election will be divided into equal amounts and deducted from your paycheck over the first 24 pay periods of the plan year. These deductions are taken from your gross pay before your federal, state, social security, and city (if applicable) income taxes are withheld. The deductions are then contributed to your FSA for your use on eligible expenses.

HCSA vs. HSA
NYS offers a Health Care Spending Account (HCSA)—a pre-tax FSA that gives you your full annual amount up front. Health Savings Accounts (HSAs) are not offered by NYS. HSAs are only available through employers that offer high deductible health insurance plans. NYS does not offer any high-deductible health insurance plans to employees.

Social Security (FICA): FSA contributions may reduce your Social Security taxes—and in turn, your future benefits. The impact is usually minimal and often offset by current tax savings. Questions? Contact the Social Security Administration (SSA) or 800-772-1213.

NYS Pension: No impact—your pension contributions and benefits stay the same.

SUNY Tax-Deferred Annuity: Not impacted by FSA participation. 

NYS Deferred Compensation Plan: Usually not impacted. However, if you contribute a percentage of your salary, FSA contributions lower the base salary used—potentially reducing your contribution slightly. Please consult your tax preparer, tax attorney, or accountant if you have any questions regarding your specific tax situation.

Manage your TASC Flex Spending Account
  FSA Login

Social Security Tax (Federal Insurance Contributions Act (FICA)
Contributions to the FSA may reduce your social security taxes. If so, based on current social security law, social security benefits at your retirement age may be slightly less as a result of your participation in the FSA program. The effect will be minimal and would likely be offset by the amounts saved in taxes today. If you are concerned about this, contact the Social Security Administration (SSA) at 800-772-1213 or visit SSA Homepage.

New York State Pension
Contributions to the FSA have no effect on your New York State pension contributions or benefits.

Deferred Compensation
Most employees’ contributions to the New York State Deferred Compensation Plan will be unaffected by participation in the FSA program. In some cases, however, participation in the FSA program may affect you. The percentage you contribute to the deferred compensation plan will be applied to a lower salary amount as a result of your FSA contributions. Since such contributions are made as a percentage of salary, your deferred compensation contribution may be lower, depending on the amount of your annual salary and the amount you currently contribute to your deferred compensation plan.

SUNY Deferred Annuity Plan
Contributions to the State University of New York’s tax-deferred annuity plan are not affected by participation in the FSA program.

Please contact your tax preparer, tax attorney or accountant if you have any questions regarding your specific tax situation. 

Am I permitted to make election changes after the plan year begins?
If you have a qualifying life event, you may be able to make a change to your FSA election by submitting a qualified life event. Please refer to the respective benefit sections for specific information on qualifying live events; HCSA, DCAA, Adoption. 

Submit your qualified life event online at Bentek, the FSA enrollment system for TASC. 

Can I enroll during the plan year?
If you have a change in status or qualifying life event that occurs after the open enrollment period ends, you may be able to enroll during the plan year. You may be eligible to enroll if you experience a change in status or qualifying life event. Please refer to the respective benefit sections for specific information on qualifying life events; HCSA, DCAA, Adoption.

Submit your change in status or qualified life event online at Bentek, the FSA enrollment system for TASC.  

If your election change, claim, or other request is denied, in full or in part, you have the right to appeal the decision by sending a written request to the FSA administrator. Contact customer service for information on how to submit your appeal.

Your appeal must include:

•     Completed Appeal Form
•   Appeal letter
•   A copy of the denied request
•   Proof of expenses and other documentation if original was insufficient
•   Any additional documents, information, or comments you think may be relevant to your appeal

Your appeal will be reviewed once it and the supporting documentation are received. You will be notified of the results of this review within 30 business days from receipt of your appeal. In unusual cases, such as when appeals require additional documentation, the review may take longer than 30 business days. If your appeal is approved, your account will be adjusted as soon as possible. Appeal decisions are based upon whether your circumstances and supporting documentation are consistent with the FSA rules and IRS regulations governing the plan.

Will money in the FSA ever be subject to taxes, or is it free from taxes? 
Money used for qualified expenses from the FSA is free from taxes.

How much money will I save by enrolling in the FSA program? 
Your savings will be based upon your individual income and tax filings. 

Does the State guarantee the tax benefits under the FSA? 
No. The State cannot guarantee that a participant will receive the intended tax benefits. It is up to each participant to make sure that contributions are made for eligible expenses within the legal and plan limits.

What responsibilities do I have to ensure the intended tax benefits of the program are received? 
You should make sure that contributions to the FSA will only be made for eligible expenses, for qualifying individuals, up to the legal or plan maximum, and for services provided in the same plan year the contributions are made.

Will I save more by taking a deduction on my income tax? 
You need to determine whether taking a tax deduction is more beneficial than using the FSA. According to the IRS, only medical and dental expenses that exceed 7.5% of your adjusted gross income can be deducted from your income taxes. Most people do not have expenses high enough to qualify for this deduction. For work-related dependent care expenses, the tax credit amount is determined by applying a percentage to your total dependent care expenses. In addition, money set aside through your FSA is exempt from FICA taxes. This exemption is not available on your federal income tax return. When it comes to adoption-related expenses, it is recommended that you only use the FSA for expenses in excess of the tax credit amount. If you enroll in an adoption FSA, you will save on federal and state taxes (where applicable).

If I reside outside of New York State, how will my participation in the FSA be affected? 
Most states follow the federal rules; however, some states may tax the FSA contributions. You must comply with the laws of the state where you reside.

Do contributions to my FSA reduce my income for purposes of the Federal Earned Income Tax Credit (EITC)? 
Yes. Contributions to your FSA will reduce your earned income for purposes of the Federal EITC. This means that participation in the FSA may affect your EITC.

How do I determine if participating in the FSA would affect my social security benefits? 
Participation in the FSA may have a minimal effect on your social security benefits upon retirement. The Social Security Administration (SSA) uses the highest 35 years of salary earned before retirement to calculate your social security benefit. However, if you are concerned, you should call the SSA for further advice at 800-772-1213 or visit SSA Homepage.

What happens if I submit a claim for an amount greater than my FSA balance? 
When you submit an eligible claim to the HCSA, you can access your funds at the start of the year. You will be reimbursed up to your full election amount regardless of how much you have contributed to your account. Contributions will continue through payroll deductions throughout the year and claims will continue to be paid until your elected annual contribution amount is met.

Dependent care and adoption claims are paid differently. If you submit a claim and your balance is less than the amount of the claim, you will only be reimbursed for the amount of money available in your account. The remainder will be reimbursed once the money is deposited into your account. This enables you to submit a claim only once and receive reimbursement on an ongoing basis until it is paid in full.

What if I change my mind? 
You may not change your mind once the plan year begins, but you can decide not to join next year. There are certain situations, called “changes in status,” or qualifying life event and if they occur in your family during the plan year, you can make a change—you can start, stop, restart, or change your deduction amounts as long as  the requested change is consistent with your qualifying event. The change in status application process is paperless. You may file a change in status application online or by calling the FSA administrator at 800-358-7202.

If I underestimate or overestimate my elections, can I transfer money between my FSA accounts? 
No, you can use monies only for the purpose for which the election was initially made. IRS Regulations do not allow monies to be transferred between accounts.

How long is my contribution in effect? 
Your contribution is in effect until the end of the plan year. Each year you will have the opportunity to re-enroll and select a new annual contribution amount.