It's back-to-school time, and as you scramble to get your kids ready for the new academic year, there may be more to think about than just picking up school supplies.
This is because August is Children's Eye Health and Safety Month, sponsored by the American Academy of Ophthalmology (AAO). Each year, the organization aims to provides information to the public that can help protect and preserve your child's eye health.
Luckily, whether you have a standard flexible spending account (FSA) or a limited care flexible spending account (LCFSA), your benefits can cover a significant portion of vision care expenses that can help your child see clearly throughout the coming school year. Here are just a few of the AAO's suggestions of what you should cover as the calendar flips to September and school gets underway.
According to the American Optometric Association (AOA), an eye exam is recommended for school-aged children every two years if there is no vision correction issue present, and those who need glasses or contact lenses should visit on an annual basis.
Before your kids get back in the classroom this fall, make an appointment with your optometrist to ensure your child's eyesight is healthy - and use your FSA to offset the costs.
Another good plan is to make sure your kids have up-to-date glasses and contact lenses that can stand up to the rigors of childhood. Your FSA covers reading glasses, prescription eyeglasses and prescription contact lenses.
If your child's eye wear is in need of an update, your FSA can cover the fresh new look they've been looking for. Visit our Optical Store to browse our selection of leading eye care brands.
Are all types of contacts covered?
If contacts are designed to correct vision problems, they're FSA-eligible. Though insurance companies might have their own policies regarding coverage of specific types or brands of lenses, they're usually reimbursable with your tax-free funds. Plus, unlike some insurance providers, which may not cover contact lenses in place of eyeglasses, if the contacts are prescribed to correct vision they are eligible, regardless of insurance plan coverage.
Vision correction accessories
Are you running low on contact lens solution? Has your child misplaced a carrying case? In addition to vision correction methods, your FSA covers a huge slate of products that can protect and prolong the lifespan of your kids' eyeglasses and contact lenses. Contact lens solution, eyeglass repair kits, cleaning cloths and much more are eligible for FSA reimbursement.
From FSA basics to the most specific account details, in our weekly Asked and Answered column, our team gets to the bottom of your most-pressing flex spending questions. It appears every Wednesday, exclusively on the FSAstore.com Learning Center. And for the latest info about your health and financial wellness, be sure to follow us on Facebook, Instagram and Twitter.
Open enrollment is your opportunity to make changes to your employee benefits elections and choose health coverage that will protect you and your loved ones for the year ahead. However, if your employer offers some type of health care or child care savings/spending account, you may be missing out on hundreds -- if not thousands -- in tax savings for expenses that you will incur over the course of the coming year.
Luckily, FSAstore.com/HSAstore.com is here to help you navigate the confusion of consumer-directed spending/savings accounts to find the plan that works for your needs. Here are four of the most common offerings:
|Flexible spending account (FSA) (also known as general medical FSA)|
|Yearly Contribution Limits||$2,750 per FSA (2020). If both spouses have an FSA through their respective employers, they could each elect the maximum for $5,500 per household.|
|Plan Year||Most often 1 year. In limited circumstances, there may be a short plan year.|
|Eligibility to Contribute||FSA plans can only be sponsored by employers and eligibility rules are set by each plan. Employees who work for employers who offer FSA plans may contribute up to the allowed maximum per year. Self-employed individuals and owners of certain types of corporations are not eligible for an FSA.|
|Account Ownership||An FSA account is owned and set up by the employer.|
|Access to Money||An employee's yearly FSA allocation is available in full on the first day of the plan year, regardless of contributions to date.|
|Change Contributions?||FSA users can only change their contributions during their Open Enrollment periods. Some plans also allow changes to contributions to be made if the account holder experiences a Qualifying Life Event, such as marriage, divorce, or birth of child.|
|Special Rules/Eligibility Exceptions||Employers can choose one of two (or none) options to provide relief for FSA users who would otherwise have to forfeit leftover funds: the $500 rollover and the 2.5 month grace period. The $500 rollover allows FSA users to move up to $500 of the previous plan year's contribution into next year's allocation (without counting against the overall contribution limit) to avoid forfeiting money to their employers at year end.|
The second is the FSA Grace Period, which gives users 2.5 months after the last day of their plan years to spend down their remaining FSA funds.
For more information about what an FSA can cover, visit the FSA Eligibility List.
|Health savings account (HSA)|
|Yearly Contribution Limits||$3,550 Individual, $7,100 Family (2020). Employee and employer contributions both count towards the limit.|
|Plan Year||There is no plan year with an HSA, funds rollover continuously each year and do not expire.|
|Eligibility to Contribute||An HSA can only be opened by a person enrolled in a qualified high-deductible health plan (HDHP) with a deductible of at least $1,400 (self-only coverage) or $2,800 (family-only coverage). The individual must not have other first dollar health insurance coverage, including an FSA. For calendar year 2020, a "high deductible health plan" is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,400 for self-only coverage or $2,800 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,900 for self-only coverage or $13,800 for family coverage.|
|Account Ownership||An HSA is owned by the account holder and is a bank account set up in the owner's name. Account beneficiaries can be assigned.|
|Access to Money||Remaining HSA account funds can be accessed at any time regardless of whether or not the person is actively contributing to the HSA.|
|Change Contributions?||HSA users can change their contribution amount at any time, as long as it does not exceed the yearly allocation limit. It is up to the HSA account holder to track contributions and ensure they do not exceed the annual limit.|
|Special Rules/Eligibility Exceptions||Unlike FSAs, HSAs can cover the cost of certain premiums, but otherwise follow nearly identical eligibility requirements. For more information about what an HSA can cover, visit the HSA Eligibility List.|
|Limited care flexible spending account (LCFSA) (also known as limited purpose FSA)|
|Yearly Contribution Limits||$2,700 per FSA (2019). If both spouses have an FSA through their respective employers, they could each elect the maximum for $5,400 per household.|
|Plan Year||Most often 1 year. In limited circumstances there may be a short plan year.|
|Eligibility to Contribute||LCFSA plans can only be sponsored by employers and eligibility rules are set by each plan. Eligible employees may contribute up to the allowed maximum per year. Self-employed individuals and owners of certain types of corporations are not eligible for an LCFSA. However, unlike general medical FSAs, LCFSAs will usually only cover qualifying dental and vision expenses.|
|Account Ownership||An LCFSA account is owned and set up by the employer.|
|Access to Money||An employee's yearly LCFSA allocation is available in full on the first day of the plan year.|
|Change Contributions?||LCFSA users can only change their contributions during their Open Enrollment periods, or if the plan allows, if they experience a Qualifying Life Event (marriage, divorce, birth of child, etc.)|
|Special Rules/Eligibility Exceptions||An LCFSA typically does not qualify as "first-dollar" coverage, and therefore an account holder can open up both an LCFSA and an HSA if they so choose. Participating in both plans allows employee to maximize their savings and tax benefits.|
- A dependent under age 13.
- The taxpayer's spouse. If the spouse is physically or mentally incapable of caring for himself or herself, and has the same residence as the taxpayer for more than half of the year.
- A dependent of the taxpayer (i.e., a qualifying child or qualifying relative could be an older relative) must be physically or mentally incapable of caring for himself or herself, and have the same residence as the taxpayer for more than half of the year.
Which expenses are covered?
- Before- and after-school care.
- Adult care of a relative who spends at least eight hours a day at your home.
- Child care at a day camp, nursery school, or by a private sitter (or by a non-tax-dependent relative). Babysitters cannot also be claimed as dependents (an older relative must be at least 18 years old).
- Adult day care center.
- Transportation by caregivers.
- Expenses for a housekeeper who also handles dependent care.
- Day camps.
- Late pick-up fees.
Expenses not covered:
Any care that is not work-related will not be covered under your DCFSA.
- Overnight camps
- Long term care (nursing home)
- School tuition or education fees, meals or food.
For more information about what your DCFSA covers, visit our Eligibility List.
|Dependent care flexible spending account (DCFSA)|
|Yearly Contribution Limits||$2,500 individuals, $5,000 if filing taxes jointly. (2019)|
|Plan Year||Most often 1 year. In limited circumstances there may be a short plan year.|
|Eligibility to Contribute||DCFSA plans can only be sponsored by employers. Employees can open an DCFSA regardless health plan enrollment. DCFSAs let you use tax-free money to cover child care for qualifying children or adult dependent care for qualifying adults and relatives. You or your spouse must be working, searching for work, or attending school full-time in order to qualify for the DCFSA.|
|Account Ownership||A DCFSA account is owned and set up by the employer.|
|Access to Money||DCFSA funds are available as they accumulate within the account. Only expenses for services already incurred will qualify for reimbursement.|
|Change Contributions?||DCFSA users can only change their contributions during their Open Enrollment periods, or if they experience a Qualifying Life Event (marriage, divorce, birth of child, etc.)|
|Special Rules/Eligibility Exceptions|
- Internal Revenue Bulletin: 2019-22
- 2020 HSA Limits Rise Modestly, IRS Says
- 2019 FSA Contribution Limits Announced by IRS