Flexible Spending Accounts (FSAs)

Flexible Spending Accounts (FSAs) allow you to pay for eligible expenses using tax-free dollars, lowering your taxable income. EnerSys offers two accounts, both administered by Empower: a Healthcare FSA for medical, dental and vision expenses, and a Dependent Care FSA for childcare and eldercare expenses.

Note: There is a “use it or lose it” rule imposed by the IRS. Estimate carefully! If you don’t spend all the money in your Healthcare FSA, you can roll over up to $680 to use the following year. Dependent Care FSA expenses must be incurred from January 1 – December 31, and any remaining balance will be forfeited. Claims for both accounts must be submitted by the deadline stated in your plan documents.

Electing an FSA: Unlike your other benefits, FSA elections do not carry over from one plan year to the next. You must make a new election when you are initially eligible and during Open Enrollment each year if you wish to participate. Once elected, your contribution cannot be changed during the year without a Qualifying Life Event.

How Much Could You Save?

Flexible Spending Accounts (FSAs) are one of the easiest ways to reduce your taxable income and keep more of what you earn. When you contribute to an FSA, the money you set aside for eligible healthcare expenses is not taxed—meaning every dollar goes further. For example, let’s say Tom sets aside $2,000 in his FSA for the year. Normally, he’d pay $560 in federal income tax, $100 in state income tax, and $153 in FICA taxes on that amount. But by using his FSA, Tom avoids all those taxes and saves $813. That’s money he can use for things like doctor visits, prescriptions, or medical supplies—without it ever being taxed. FSAs don’t just help with budgeting—they help you make the most of your paycheck.

Healthcare FSA

Contribute up to $3,400 per year, pre-tax, to pay for copays, prescription expenses, lab exams and tests, contact lenses and eyeglasses, and other eligible medical, dental and vision expenses.

Frontloaded: your full elected annual contribution is available on the first day of the new plan year. If you are new to the plan mid-year, it is available the date you enter the plan.
You may roll over up to $680 from one year to the next if you do not incur enough claims to deplete your balance.
You may not contribute to a Healthcare FSA if you contribute to an HSA.
You can contribute regardless of medical enrollment, however the Healthcare FSA is typically paired with the PPO Plan. If you are enrolled in the HDP Plan, consider enrolling in an HSA instead.

For a list of eligible expenses, visit empowermyretirement.com.

Dependent Care FSA

Contribute up to $7,500 per year ($3,750 if married and filing separate tax returns), pre-tax, to pay for childcare and/or eldercare expenses that are necessary for you and your spouse to work or attend school full-time. Eligible expenses include preschool, after-school care, daycare and non-overnight summer camps.

Not frontloaded: funds can only be spent after they are accumulated in the account via payroll deduction.
If you are married, both you and your spouse must work and earn income to qualify for reimbursement, unless one spouse is between jobs and actively looking, or is disabled and unable to work.
If you are divorced, only the custodial parent may use a Dependent Care FSA.
There is no rollover provision. Any funds remaining in your account at the end of the year will be forfeited.
You can contribute regardless of medical enrollment. You do not need to be enrolled in any medical plan.

You cannot use your Healthcare FSA to pay for Dependent Care expenses.

Without an FSA, Tom Would Pay

28% in federal income tax: $560 savings
5% in state income tax: $100 savings
7.65% in Federal Insurance Contributions Act (FICA) tax: $153 savings

His total tax savings for the year with an FSA: $813

By using an FSA, Tom reduces his taxable income—and saves $813 for the year.