Frequently Asked Questions

1 What are optional spending accounts (FSAs)?

Optional spending accounts work somewhat like a personal bank account. Through payroll deductions, you can set aside money to cover eligible health care and dependent day care expenses.

The money comes out of each paycheck - before taxes - and is deposited in a special account. You can draw money from the account during the year to reimburse yourself for eligible expenses.

Vought Aircraft offers two separate FSAs, one for health care expenses and one for dependent day care expenses.

2. How do FSAs work?

If you are considering enrolling in an FSA, estimate your out-ofpocket expenses for health care and/or dependent day care for each benefit plan year, July 1 to June 30. Contributions to your account are deducted from your paycheck on a before-tax basis.

Once your contributions are deposited, they remain in your account until you file a claim for reimbursement. Your contributions are used to reimburse you for eligible health care and dependent day care expenses that you incur during the benefit plan year.

3. Why should I enroll in an FSA?

An FSA can provide a significant tax savings by enabling you to pay certain eligible expenses with before-tax dollars. You save money on FICA taxes, federal income taxes and, in most areas, state and local income taxes.

4. If I enroll in both FSAs, can I transfer money between accounts?

No, according to IRS rules, you cannot transfer money between them.

5. If I do not use all the money in my account, will I receive a refund?

No, the IRS requires you to forfeit any amounts remaining in your account at the end of the benefit plan year (June 30). You cannot receive a refund or roll the money over to the next year. That is why it's important to estimate your expenses as carefully as possible.

6. How long do I have to file my FSA claims?

You have 90 days after the end of the benefit plan year to file claims for expenses incurred during the benefit plan year. For example, you must file claims by September 30, 2001 for any expenses you incurred during benefit plan year July 1, 2000 to June 30, 2001.

7. Is there a minimum amount of expenses that I should accumulate before submitting a claim for reimbursement?

Yes, you should wait until expenses total at least $25. However, during June - the last month of the benefit plan year - submit all of your expenses, including the small ones.

8. What types of expenses are eligible for reimbursement from the health care FSA?

You can use the before-tax dollars in your FSA to pay certain medical, dental, vision, hearing, and other health care expenses not covered by your health plan. Eligible expenses also include copayments, deductibles and coinsurance.

9. To enroll in the health care FSA, am I required to participate in the Vought Aircraft medical or dental plan options?

No. You can submit expenses unreimbursed by any medical or dental plan - such as your spouse's employer's plan - and receive reimbursement under the Vought Aircraft health care FSA.

10. What types of expenses are eligible under the dependent care FSA?

In general, you can use before tax dollars to pay for day care for your children under age 13 and qualifying older dependents (including eligible dependent parents).

11. Can I use the dependent care FSA if my day care provider is a relative?

Yes, provided you do not claim your relative as a dependent on your federal income tax retum, and he or she is not your spouse, your child's other parent, or your child who is under age 19. You must provide your day care provider name, address and tax identification number (Social Security number) on your tax retum.

12. During the year, can I change the amount of my contributions to the FSAs?

Generally not. You can change your contribution amount if you experience a qualified change in status. Of course, the change you make must be consistent with your life status change.

13. What happens to my FSA contributions if I take an approved, unpaid leave of absence?

Under the dependent day care FSA, your contributions stop while you are on a leave. Unless you are working, you cannot contribute to this account. Expenses that you incur during your leave are not eligible for reimbursement.

Under the health care FSA, you can continue making contributions to your account with after-tax dollars. This enables you to submit expenses that you incur while you are on leave. If you do not contribute to the account, your participation ends and claims you incur are not eligible for reimbursement.

When you return to work, you can again contribute to the FSAs. For more details, see "What Happens to Your Benefits in Special Situations."