Flexible Spending Accounts
Save money on eligible health care and dependent care expenses by using tax-advantaged Flexible Spending Accounts (FSAs). Western Union offers a general-purpose Health Care FSA, a limited-purpose Combination Health Care FSA, a Dependent Care FSA and a Commuter Transit Benefits program. With an FSA, you set aside a certain amount of money that you want to contribute each paycheck or each year to your account. This money comes out of your paycheck before taxes and can be used only for eligible expenses.
All three FSAs are administered by WEX, formerly Discovery Benefits. You can also save on commuter expenses by using the Commuter Transit Benefit Program. For more information on the Western Union commuter program go to People Services and search for Health Equity Commuter Program.
Here’s a brief look at these tax-advantaged accounts:
- Health Care FSA: If you are enrolled in Western Union’s 900 Deductible Plan or if you are not enrolled in any medical plan, you can enroll in this account to be reimbursed for medical, prescription, dental and vision care expenses during the plan year. (Note: If you contribute to a Health Savings Account (HSA) in 2022, you are not eligible to contribute to a Health Care FSA, but you may be eligible to enroll in the Combination FSA for eligible expenses, generally vision and dental expenses.)
- Combination Health Care FSA: You must be enrolled in the 1850 or 2850 deductible plan (with HSA option) to enroll in this account. It allows you to be reimbursed for dental and vision care expenses incurred during the plan year.
- Dependent Care FSA: This account can be used to pay for eligible dependent care expenses on a pretax basis for qualifying child or relative care so you and your spouse can work.
Health Care FSA
If you enroll in the 900 Deductible Plan in 2022 you can contribute up to $2,750 to a Health Care FSA to pay for copays, deductibles and coinsurance related to your or your dependents’ eligible medical, dental and vision care or prescription drug costs. The CARES Act of 2020 has updated FSA rules so employees can now be reimbursed for over-the-counter (OTC) medicines without a prescription. Note: If you are a participant in the 1850 Deductible Plan with HSA or the 2850 Deductible Plan with HSA, you are not eligible to elect the Health Care FSA option; however, you can enroll in the Combination Health Care FSA.
Eligible Health Care FSA expenses
You can use the money in your Health Care FSA to cover eligible medical, dental, and vision expenses that aren’t covered by your plans. If you have a spouse or tax dependents, you can use it for their health care expenses, too. For a full list of eligible expenses, see IRS Publication 502, “Medical and Dental Expenses.”
Combination Health Care FSA
If you enroll in the 1850 Deductible Plan with HSA or the 2850 Deductible Plan with HSA in 2022 you can contribute up to $2,750 to a Combination Health Care FSA. With the Combination Health Care FSA, you set aside tax-free dollars – money taken out of your paycheck before income or Social Security taxes have been calculated–to pay for eligible health care expenses, generally dental and vision.
Here’s how it works: Prior to meeting the IRS’ HDHP minimum annual deductible, you can use the Combination Health Care FSA to pay for eligible dental, vision and preventive brand prescription expenses only. Then, after meeting the IRS’ minimum annual deductible, you can use the Combination FSA like a Health Care FSA to pay for qualified health care expenses that you incurred after meeting the IRS’ minimum annual deductible. The CARES Act of 2020 has updated FSA rules so employees can now be reimbursed for over-the-counter (OTC) medicines without a prescription.
Unlike your unused HSA funds that roll over from year-to-year, any unused FSA funds are forfeited. So, estimate your contribution carefully. You cannot be reimbursed under the Combination FSA for expenses that have been reimbursed under the HSA, or another health plan.
Put money into your Combination FSA – and use it
- Before each plan year, you decide how much money to put into your FSA. The money comes out of your paycheck before taxes, and it is not taxed when you use it.
- You get a debit card to pay for eligible expenses. Or, you can submit claims to WEX for reimbursement.
- Timing is everything: Expenses must be incurred during the FSA plan year, which is January 1 – December 31, and reimbursement must be requested by April 30 the following year.
- Plan carefully! You could lose any remaining balance at the end of that plan year if you don’t meet the timing requirements for when the expense occurred and when the reimbursement is requested.
- If you leave Western Union during the plan year, any remaining money in your FSA can only be used to reimburse you for eligible expenses incurred through your coverage termination date. You have 90 days from the termination of your active coverage (typically the last day of the month in which you leave the company) to submit expenses for reimbursement.
Eligible Combination Health Care FSA expenses
Use the money in your Combination FSA to cover eligible dental and vision expenses, including:
- Dental care and orthodontia, such as fillings, X-rays, braces, caps and mouth guards
- Vision care—including eyeglasses, contact lenses, solutions and supplies, and LASIK eye surgery
- Preventive care not covered under your medical plan—such as any vaccines or diagnostic tests
- Prescriptions and eligible over-the-counter items for dental, vision and preventive care
Eligible expenses do not include cosmetic procedures, treatments not supervised by a qualified health care professional, or expenses that are not medically necessary. For a full list of eligible expenses, see IRS Publication 502, “Medical and Dental Expenses.”
Dependent Care FSA
In 2022, you can set aside up to $5,000 for eligible dependent care expenses. Designed for working parents, the Dependent Care FSA reimburses the cost of dependent child care and elder care. To estimate your account:
- Use your current or prior year dependent care expenses as a guide.
- Explore the FSA tools available to you at Mercer Marketplace 365+.
Eligible Dependent Care FSA expenses
- Use the money in your Dependent Care FSA to cover eligible day care and elder care expenses that allow you or your spouse to work. Here are a few examples:
- At-home care for a child or adult you claim on your tax return.
- Dependent care centers or nursery schools that meet state or local requirements.
- Family or adult day care centers for your tax dependent who spends at least eight hours a day in your home.
For a full list of eligible expenses, see IRS Publication 503, “Child and Dependent Care Expenses.”
Managing your FSA account
Managing Your FSA accounts
FSAs are easy to use, and Western Union makes it even easier to manage your FSA accounts. To view balances, file claims, upload receipts and more:
- Go to your Mercer Marketplace 365+ account and click on the Link To Your Savings and Spending Accounts.
How much could you save?
Here is an example. Jennifer decides to set aside $2,000 in an HSA or FSA for the year. Normally, on that money, she would pay $560 in federal income tax, $100 in state income tax, and $153 in FICA tax. So, by contributing that $2,000 to her HSA or FSA, she will get an $813 tax savings for the year.
|Without an HSA or FSA, Jennifer would pay||Savings|
|28% in federal income||$560|
|5% state income tax||$100|
|7.65% in Federal Insurance Contributions (FICA) tax||$153|
|Her total tax savings for the year with an HSA or FSA||$813|
This hypothetical illustration is for educational purposes only. Dollar amounts or savings will vary depending on income, state and city tax rules, and other factors. Please consult a tax, legal or financial advisor about your own personal situation.
Commuter transit benefit program
Set aside pretax payroll dollars to pay for your commuter expenses incurred to come and go to work. Enroll using the online Health Equity website. Annual pretax contribution limits are set by the IRS. For more information on the Western Union commuter program go to People Services and search for Health Equity Commuter Program.