Flexible Spending Accounts for Employees

We contract with Navia Benefit Solutions to deliver our Flexible Spending Account (FSA) program. Members may contact Navia customer service phone or by visiting the member portal. The portal can be used to view the status of your claims submissions, account balances and a host of helpful health and dependent care related information.

Flexible Spending Accounts (FSA) Highlights

Flexible Spending Accounts Plan offers you the opportunity to set aside pre-tax dollars from your paycheck to pay for either health care or dependent care (child or elder care) expenses that would normally be paid out of pocket. Enrolling in the flexible spending account program reduces your taxable income. 

Use it or lost it
When enrolling in the Flexible Spending Account(s), for the first time or during Open Enrollment, estimate eligible expenses carefully. This is a use it or lose it program. However, there is a Rollover plan feature on the 2024 Health Care FSA which allows you to roll over up to $610 of your unclaimed balance to the following plan year in addition to the amount you elect for that plan year, under certain conditions. See the Health Flexible Spending Account section below for more information. Otherwise, any money left in the account after a 90-day claims filing grace period (January 1 thru March 31) following a calendar year end, will be forfeited to the Employee Benefit Trust Fund. 

Health Care FSA claim substantiation requirements
Each time you swipe/use your Navia Benefits Debit Card, the provider is immediately paid on your behalf and the expense is deducted from your Health Care FSA remaining balance for that year. If you use your Navia debit card for a medical, dental or vision known copay amount at an accredited provider location (e.g., $20/$40 medical office visit copays), or a prescription drug purchase at retail drug store locations, or an FSA eligible purchase at an IIAS retailer, you will not be required to substantiate your charge with itemized documentation.

However, IRS regulations require you to substantiate all other expenses that cannot be cleared by the above processes in the card system. If your Navia Benefits Card charge requires substantiation, Navia will indicate such in your Navia online portal. If you have not taken care of the required substantiation and Navia has your email on file, you may get a series of emails/reminders at a later point. However, it is each participant’s responsibility to register for account access on the Navia participant portal to view the status of their FSA claims to see if action is required on your part to validate any claims. More information on FSA claim substantiation can be found on the Navia website - Navia Benefits - Online Debit Card Substantiation.

What happens if you don’t substantiate timely? IRS regs require that the unsubstantiated amount(s) becomes taxable income to you when all reconciliation processes are complete. That means a posting of “extra income” on a City paycheck and extra taxes out of that paycheck thus reducing your net income/take home pay when that happens. If you are terminated or retired from the City when this reconciliation is finalized, you won’t have any pay checks to take care of the needed income and taxing transactions, but your W-2 for that year will include this extra taxable income amount.

Re-enrollment is required every year to remain in the plan
Note that IRS regulations require re-enrollment into the FSA each year during Open Enrollment. If you intend to participate and contribute towards a health and/or dependent care FSA for the following calendar year, you MUST enroll during Open Enrollment otherwise your elections will default to $0 starting on January 1. 

Participants may not seek reimbursement for health care or dependent care (child/elder care) expenses for Committed Partner or Committed Partner children/elders under FSA accounts.

Health Flexible Spending Account

The 2024 Health Flex plan allows you to set aside up to $3,050 pre-tax from your paycheck (subject to change annually) to pay for eligible out-of-pocket health care expenses that are not covered by your insurance. It covers not just your medical expenses, but also the expenses of your spouse and dependents. Depending on your tax bracket, you may save up to 30% or more in taxes.

Examples of reimbursable expenses include:

• Deductibles
• Coinsurance
• Co-payments
• Certain items not covered by insurance (including allowable over-the-counter supplies and medicines)

The following example illustrates how an employee who earns $35,000 a year with $1,500 in eligible health care expenses could save money using an FSA:

*Actual savings will vary based on the individual tax situation

Health FSA Rollover Feature

Re-enrollment is required each year during Open Enrollment for FSA plans. As long as you re-enroll, the 2024 Health FSA Plan allows you to rollover up to $610 of your unused balance into the the following plan year in addition to the amount you elect for that plan year. To qualify for the rollover feature, you must re-enroll in the Healthcare FSA during open enrollment with a minimum annual election of $100. This $610 will not be subject to the "use-it-or-lose-it" rule from the 2024 to 2025 Plan Year. However, balances in excess of $610 will be subject to the "use-it-or-lose-it" rule.

Dependent Care Flexible Spending Account

The Dependent Care Flex Plan allows participants to set aside up to $5,000 per calendar year (if single, head of household or married and filing a joint tax return) to pay for eligible child or elder care services that are needed so that the participant and spouse (if applicable) can work. Once a qualifying child care expense is incurred, the receipts may be submitted to Navia for reimbursement from the dependent care account. All claims will be reviewed for eligibility and accuracy. Reimbursements made from this account will be equal to the amount of the claim, but not more than the current balance in the dependent care account. This account is for daycare expenses ONLY. Dependent medical/dental/vision expenses are not reimbursable through the dependent care flex account.

Examples of dependent care arrangements which qualify include:

• A Dependent (Day) Care Center, provided it complies with applicable state and local laws if care is provided by a facility for more than six individuals
• An educational institution for pre-school children
• For school-age children (Kindergarten through age 12), only expenses for before and after school care are eligible. Tuition fees do not apply
• An "individual" who provides care inside or outside your home (who is not your spouse, child under age 19 or anyone you claim as a dependent for federal income tax purposes).