Use the FSA to pay for eligible healthcare expenses that are not covered by any medical, dental, or vision coverage. Generally, eligible healthcare expenses may be claimed only for expenses incurred during the period when you are enrolled in a City-sponsored medical plan. You may use an FSA for healthcare expenses of:

• Your spouse and any child you claim as a dependent on your tax return.
• Anyone who is your “health plan tax dependent” as defined by the IRS.

Visit healthequity.com/fsa-qme to view a searchable list of FSA eligible expenses

FSA and Healthcare Savings Accounts (HSA)

LAwell does not offer a high deductible health plan and the FSA offered through the LAwell program is not established as a HSA-compatible option. If you are enrolled in a high-deductible health plan with your spouse/domestic partner, former employer, or other organization you should consult with your tax advisor before enrolling into LAwell’s FSA. Enrolling in an FSA is considered an irrevocable election; see “Important Deadlines and Restrictions” section above for more information.

How Much You Can Set Aside

You can set aside from $300 up to $3,200 (maximum amounts subject to federal law revision) annually in a Healthcare Flexible Spending Account. Your contributions are deducted from your paycheck (pretax) each pay period.

Estimating Expenses and Tax Savings

To estimate your annual expenses and the tax savings of setting up a FSA, log into your Benefits Central Portal account. As part of the enrollment process, you’ll find links to a calculator for each account.

Debit Card

You will automatically receive a debit card to use for eligible healthcare expenses at any provider or retailer that accepts debit cards. The debit card is an additional convenience option and is not intended to replace the traditional claim process. Some eligible healthcare expenses may not be available through the debit card and will only be eligible through filing a traditional claim. There is no debit card option for the Dependent Care Account.

 You can use a DCA for day care expenses you have for your eligible dependents while you and your spouse work or go to school full-time. Your eligible dependents are:

• Children under age 13 you claim as dependents on your tax return.

• Anyone age 13 or older who meets the IRS definition of “health plan tax dependent,” lives with you more than half the year, and is physically or mentally unable to care for themselves. This may include an elderly parent or disabled dependent.

Generally, dependent day care expenses may be claimed only on days you work. There are exceptions. For a short absence, such as a minor illness or vacation, day care expenses may be claimed if those expenses are paid on a weekly or longer basis. In addition, if you work part-time, expenses may be claimed if you are required to pay a fixed rate – such as a full weekly rate – rather than paying for only the time you are working.

To be reimbursed, day care must be provided by a person for whom you can provide a Social Security Number or day care facility with a Taxpayer Identification Number. Day care provided by any sitter who you or your spouse claims as a dependent on your tax return cannot be reimbursed through your account. This includes day care services provided by your children or stepchildren under age 19. In addition, day care provided by your spouse or former spouse is not eligible for reimbursement.

How Much You Can Set Aside

Generally, you can set aside from $600 up to $5,000 (maximum amounts subject to federal law revision) annually. Your contributions come out of your check each pay period. The total amount you can set aside may change depending on your tax filing status and whether your spouse’s employer offers a similar DCA. If you and your spouse both work, your maximum contribution cannot be more than the income of the lower-paid individual – you or your spouse – and cannot exceed $5,000.

Dependent Care Account & Taxes

As you consider a DCA, think about what works best for you – the reimbursement account or the dependent care tax credit provided by federal law. It is important to keep in mind that you cannot take the tax credit for any amounts that are reimbursed through a reimbursement account. In some cases, the tax credit may provide more savings than a reimbursement account. Generally, you will save more on federal taxes using a DCA in these situations:

• You are eligible for the Earned Income Tax Credit. You are eligible for the credit if you have less than $11,000 in investment income and your income (or the income of you and your spouse, if you are married filing jointly) is less than the amount set forth for 2025, depending on your number of children.

• You are single, you file your taxes as head of household, and your household taxable income is approximately $42,000 or more (assuming one dependent).

• You are married, you file a joint return, and your household taxable income is approximately $48,000 or more (assuming one dependent).

Dollar amounts are based on federal tax law applicable for when you are filing taxes in 2025 for the 2024 tax year. These are just guidelines and do not take into account state taxes. If you have questions about tax savings, please consult a tax advisor.