Section 125

Flexible Spending Account

Flexible Spending Accounts (FSA)

The Section 125 plan also lets you redirect a portion of your pay, through the convenience of payroll deduction, to create a spending account for healthcare and/or dependent care expenses. The money that goes into your spending account(s) is deducted on a pre-tax basis. This means that the money is deducted from your pay before federal, state and social security taxes are calculated. Because you do not pay these taxes on money that goes into your spending accounts, you decrease your taxable income – and increase your take home pay.

In estimating your election amounts for the medical, limited and/or dependent care accounts, remember all expenses must be incurred between January 1, 2020 and December 31, 2020*. Estimate conservatively, as unused funds at the end of the plan year are forfeited. To help estimate your annual FSA election, please refer to the Election Worksheet in the "Learn More" section below. Medical and Dependent Care amounts are not “transferable” between accounts. For a complete description of the plan, refer to the Flexible Spending Account Plan document here, in the "Learn More" section below, or you can obtain a copy from the Business Services Department.

How much money should you put into your spending account? That depends on your expenses. We recommend you review eligible expenses for the last few years to predict your expenses for 2020. During your enrollment, you’ll elect an annual contribution amount which will then be deducted from your paycheck in equal monthly installments. 

Consider how much to put aside carefully, once you make your choices, your contributions will remain unchanged unless you experience a qualifying change in family status. The changes you request must be consistent with the status change event.

Examples of Qualifying status changes include:

Marriage.

Divorce, legal separation or annulment.

Birth or adoption of your child.

Death of your spouse or child.

Change in your or your spouse’s employment status.

Change in your number of tax dependents.

Change in your dependent’s eligibility (for example, your child reaches age 13) where he/she is no longer eligible under a Dependent Care Account.

Change in your child care/elder care provider or cost of coverage, such as a significant cost increase charged by your current day care provider, or a change in your day care provider. This applies to a Dependent Care Account only.

You can use the money in your reimbursement accounts only for expenses incurred in 2018.

Internal Revenue Service regulations prevent unused money in your accounts from being returned to you; any unused amounts are forfeited (i.e., “use it or lose it”).

As you plan, it is also important to remember your health care and dependent care spending accounts are separate. You cannot transfer money from one account to the other.

For newly hired employees, your elections should be calculated based on your anticipated expenses from your hire date through December 31, 2020. To determine your monthly contribution amount, divide your anticipated expenses by the number of months remaining in 2020.

LSR7 Section 125 options:

Pretax Premium Payment

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. 

Medical Flexible Spending Account

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 2019 is $2,700 per person. The limit for 2020 is $2,750 per person.

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 2019 and enroll in a Health Savings Account (HSA) for 2020, you must have a $0 balance in your FSA as of December 31, 2019. 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.

Limited Flexible Spending Account

(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 2019 is $2,700 per person. The limit for 2020 is $2,750 per person. Estimate conservatively as unused funds at the end of the plan year are forfeited.

Dependent Care Flexible Spending Account

The IRS limits how much you can contribute each year into a Dependent Care FSA. The limit for 2019 and 2020 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.

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.

Lost Surency FSA Debit Card

If you need a replacement Surency FSA Debit Card, go to the Lost ID Card page.

Learn More

Cafeteria Plan PDF

Cafeteria Plan Document

Surency Flex

What is a Dependent Care FSA?

Surency Flex

Eligible Medical Expenses

Surency Flex

Accessing Your Account Funds

Surency Flex

Benefits of the Surency Flex Member Account

Surency Flex

Benefits of the Surency Flex Mobile App

Surency Flex

Election Worksheet

Member Tools

Member Tools