Section 125

The first way to receive tax savings is to elect for your District sponsored insurance premiums to be taken out of your paycheck pre tax.

Your insurance premiums are paid directly to the insurance company requiring no paperwork from you.

This election must be made during the online enrollment process and can be changed annually at open enrollment. 

HSA participants are NOT eligible for the Medical Flexible Spending Account but may establish a Limited FSA (see below)

The Medical FSA helps you pay for eligible health care expenses not paid by insurance; it does not replace an insurance plan, but it can help you get more for your money by using pre-tax dollars on out-of-pocket health care services. The IRS limits how much you can contribute each year. The limit for 2022 is $2,850 and 2023 is $3,050 per person. 

Any balance in the Medical FSA account on December 31 will NOT roll over to the following year. You have until March 31 of the following year to request reimbursement for prior year expenses. Any remaining funds are then forfeited. 

The IRS limit is per person and not per family. Therefore, if a husband and wife both participate in their respective employer’s FSA plans, each cannot contribute more than the individual IRS limit.

Generally, any health expense (except for cosmetic procedures and insurance premiums) that is considered tax deductible can be paid through your medical spending account. You can use your medical spending account to pay expenses for you, your spouse, and your eligible children, even if they are not enrolled in a Lee’s Summit School District medical plan. You can file claims for any amount up to your total annual contribution amount at any time during the year, even if you have not yet had that amount withheld from your pay. You will receive a reimbursement for your entire claim. You will simply continue to make your contributions each paycheck to cover the claim. A brief listing of the most common eligible expenses can be found at the top of this page.

If you are enrolled in a Section 125 Medical Flexible Spending Account (FSA-Medical) for 2022 and enroll in a Health Savings Account (HSA) for 2023, you must have a $0 balance in your FSA as of December 31, 2022. There are specific IRS regulations when FSA participants enroll in an HSA. For additional information, please contact the District’s Benefits Specialist at (816) 986-1046.

(ONLY for HDHP PPO Enrollees with HSA)

HDHP enrollees who contribute to a Health Savings Account (HSA) are ineligible to contribute to a regular Medical FSA, but do have the option of enrolling in a Limited FSA. The Limited FSA allows reimbursement of you and your dependents’ dental and vision expenses only.

You can always run your dental and vision expenses (ex: orthodontics, Lasik, etc) through your HSA, but you may choose to open a Limited FSA in order to maximize the savings potential of your HSA, or if you or your dependents have dental and/or vision expenses which exceed the amount you are allowed to contribute to an HSA.

Like the regular Medical FSA, the IRS limits how much you can contribute each year. The limit for 2022 is $2,850 and the limit for 2023 is $3,050 per person. Estimate conservatively as unused funds at the end of the plan year are forfeited. Any balance in the Limited FSA account on December 31 will NOT roll over to the following year. You have until March 31 of the following year to request reimbursement for prior year expenses. Any remaining funds are then forfeited. 

The IRS limits how much you can contribute each year into a Dependent Care FSA. The limit for 2022 and 2023 is $5,000, or $2,500 if married but filing taxes separately. The “use it or lose it” rule also applies to Dependent Care FSA. You can be enrolled in both a Dependent Care FSA and HSA.

You may choose the 9 month option with deductions from your January through May and September through December paychecks or you may choose the 12 month option with deductions from your January through December paychecks.

Expenses paid through your Dependent Care spending account must be incurred solely for the purpose of either allowing both you and your spouse to work or look for work; or allowing you to work while allowing your spouse to attend school full-time. Furthermore, these expenses must be for the care of a child under age 13, or for a dependent who is not capable of self-care. If you are paying an individual for day care services, that person will need to report any income received from you to the IRS. You will need to provide the name, address and social security number/tax identification number of your day care provider on your reimbursement claim form and federal income tax forms.

You will be reimbursed from the Dependent Care spending account only up to the amount you have contributed at any given time. If you submit a reimbursement claim which is larger than your account balance.

You can request reimbursement for eligible expenses incurred from January 1 through December 31 of the calendar year for which you enroll only. Any balance in the Dependent Care account on December 31 will NOT roll over to the following year. You have until March 31 of the following year to request reimbursement for prior year expenses. Any remaining funds are then forfeited. 

You may request reimbursements online, via email, fax, or mail to Surency if you are not able to use the supplied debit card. 

If you terminate employment with LSR7, you will be able to submit claims for reimbursement within 90 days of your termination date for services incurred through the last day of the month in which your employment ended. Your debit card, however, will stop working the day your employment ends. 

Examples of eligible dependent care expenses include:

• Costs for a day care center.
• Costs for a caregiver for dependent day care provided inside or outside your home.
• Costs for day care provided to legally dependent adults who are physically or mentally unable to care for themselves. (Legally dependent adults must spend a minimum of eight hours a day in your home.)

Examples of ineligible dependent care expenses include:

• Weekend, evening and summer babysitting that is not work-related.
• Nursing home expenses.
• Amounts paid to an immediate family member under age 19 or to another dependent.
• Tuition expenses for schooling beginning with the first grade.

Please check with your tax adviser to help you determine whether the current dependent care income tax credit or the Dependent Care FSA will be most beneficial to you based upon your income and tax bracket.