In Detail...

You have two Flexible Spending Account options. The Health Care Flexible Spending Account helps you save money on your out-of-pocket medical, dental, vision and hearing expenses. The Dependent Day Care Flexible Spending Account helps reduce the after-tax cost of your dependent day care expenses.

On This Page...

Are They Right For You?
Health Care Flexible Spending
Eligible Health Care Expenses
Plan Your Expenses Carefully!
Ineligible Health Care Expenses
Dependent Care Flexible Spending
Eligible Dependents
Eligible Dependent Care Expenses
Ineligible Dependent Care Expenses
How Much Can You Contribute?
How Other Benefits Are Affected
Health Care Flexible Spending Account Vs. Tax Deduction
Dependent Care Flexible Spending: Account Vs Tax Deduction
Dependent Care Flexible Spending: Account Vs Tax Credit
Reimbursements
When Participation Ends

ARE THEY RIGHT FOR YOU?

Optional spending accounts can be a great way to save money in taxes if:

• Your health care or dependent day care expenses are predictable
  
• You can afford to pay your health care or dependent day care provider and wait up to six weeks for reimbursement
  
• You save more using the Flexible Spending Accounts than you do using the federal dependent care tax credit or health care tax deduction.
  

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HEALTH CARE FLEXIBLE SPENDING

You can use the Health Care Flexible Spending Account for health care expenses that are considered eligible deductions on your federal income tax return, but are not reimbursed by another health plan.

Health care expenses can be for:

• You
• Your spouse
• Your unmarried children (including stepchildren, adopted children and foster children)
• Other dependents who live with you throughout the calendar year.

If your children, dependents or relatives depend on you for more than one-half of their financial support during the current calendar year, their expenses are eligible. If you are divorced or legally separated, expenses for your children who are considered your dependents for federal tax purposes are eligible.

Do you expect to pay a deductible, coinsurance, or copayment under the Vought Aircraft health plans or any other health plan? If so, there is a good chance you can save money by enrolling in the Health Care Flexible Spending Account. Use the worksheet below to estimate your out-of-pocket expenses for the coming benefit plan year (July 1 to June 30).

Click Here For Help In Estimating Your Expenses

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ELIGIBLE HEALTH CARE EXPENSES

The Health Care Flexible Spending Account reimburses you for these eligible expenses:

• Medical and dental plan copayments, deductibles and coinsurance
• Charges above the medical and dental plans'usual, reasonable and customary limits
• Expenses that are partially covered by your medical or dental plan, such as the cost of:
  • Alcoholism/substance abuse (chemical dependency) treatment (including meals and lodging provided by a treatment center)
  • Birth control devices
  • Chiropractic or physical therapy
  • Dental bridges and dentures
  • Eyeglasses or contact lenses
  • Hearing aids and their batteries
  • Infertility services
  • Insulin
  • Medical equipment, such as crutches or wheelchairs
  • Mental health treatment
  • Orthodontia - Periodontal cleanings
  • Prescription drug copayments and coinsurance
  • Retin A (when medically necessary and not for cosmetic purposes)
  • Speech therapy
    
    
• Certain expenses that are not covered by your medical or dental plan (but can be reimbursed), such as the cost of:
  • Acupuncture
  • Contact lens replacement insurance
  • Home modifications to accommodate a disabled person (including disabilities caused by arthritis)
  • Laser eye surgery, such as LASIK, radial keratotomy and penetrating keratoplasty
  • Removal of lead-based paint to prevent your young child who has (or had) lead poisoning from eating paint
  • Massage therapy
  • Orthopedic shoes
  • Smoking-cessation programs (does not include expenses for drugs that do not require a prescription, such as nicotine gum or patches)
  • Sterilization reversal
  • TMJ post-surgery therapy and appliances

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PLAN YOUR EXPENSES CAREFULLY!

Is the June 30 deadline approaching and you still have money in your account?

Remember, your health care plan copayments, deductible and coinsurance are eligible expenses under the Flexible Spending Account. Here are a few ideas for using your balance:

• Invest in an extra pair of glasses, prescription sunglasses or contact lenses
• Stock up on contact lens cleaning solution and disinfectants
• Treat yourself to a trendy pair of designer frames or special lenses
• Try acupuncture for your aches and pains, if your doctor recommends it
• Get any needed physical exams, dental exams or diagnostic tests before the benefit plan year ends
• Replace old or worn fillings before the benefit plan year ends, if your dentist recommends it
• Track the cost of your gas, parking, and tolls (or taxi charges) to and from your health care provider, and submit the travel expenses for reimbursement.
• Travel and lodging away from home for medical reasons (Limitations may apply See IRS Publication 502 for details.)
  
• Tuition and tutoring for a child with severe learning disabilities, including dyslexia
  
• Transportation to and from your health care provider (including Alcoholics Anonymous [AA] meetings)
  
• Vitamins by prescription
  
• Weight-loss programs prescribed by a physician for a specific ailment
  
• Nursing care for a dependent (such as your dependent elderly parents) if it is not custodial nursing home care

Other expenses that are considered tax deductible by the IRS:

These include the cost of many services and equipment for the disabled. For a complete list of eligible expenses, see IRS Publication 502, available from your local IRS office. Or, order a copy from the IRS by calling 1-800-829-3676.

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INELIGIBLE HEALTH CARE EXPENSES

The Health Care Flexible Spending Account does not reimburse you for the following (even if they are recommended by your doctor):

• Cosmetic treatment (unless the treatment corrects a deformity arising from or directly related to a congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease), Cosmetic treatment includes, but is not limited to, teeth bleaching, laser peels, chemical peels, hair transplants and treatment for male pattern baldness
• Drugs prescribed for cosmetic purposes (such as Rogaine, a drug prescribed for hair-loss treatment)
• Dance or swimming lessons
• Electrolysis
• Expenses reimbursed through any health insurance policy or plan, such as your spouse's health plan or Medicare
• Expenses you or a family member incurred before the effective date of your Health Care Flexible Spending election, or change of your Health Care Flexible Spending election
• Expenses you or a family member incurs after the end of the benefit plan year (June 30)
• Health club dues, YMCA dues, and related expenses
• Household help
• Liposuction
• Marriage or family counseling
• Maternity clothes, diaper service, and related expenses
• Nonprescription drugs or vitamins (unless prescribed by a physician as periodically necessary to treat a specific disease or condition)
• Custodial nursing home care
• Premiums for automobile insurance, including premiums to insure medical care for persons injured by or in your car
• Premiums for life, disability or accidental death and dismemberment (AD&D) insurance
• Premiums for medical, dental, and vision insurance, including COBRA premiums
• Transportation to and from work (even if your condition requires special means of transportation)
• Trips or vacations taken for relief of a condition, change in environment, improvement of morale, or general health purposes
• Tuition for a child with disciplinary problems who is enrolled in a special school
• Uniforms
• Weight-loss programs (unless prescribed by a doctor as medically necessary for the treatment of a specific disease or condition)
• Any other expenses considered not deductible on a federal income tax return (see IRS Publication 502).

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DEPENDENT CARE FLEXIBLE SPENDING

This account provides tax-free reimbursement of eligible dependent care expenses while you are working. If you are married, your spouse also must work (or actively search for work), unless he or she is:

• A full-time student at least five months of the year, or
• Mentally or physically disabled and unable to care for a dependent.

If you are divorced or legally separated, you can use the Dependent Care Flexible Spending if you have custody of your child for a longer period during the year than does your child's other parent. In addition, you must provide more than half of your child's financial support, and your child is claimed as a dependent on your federal income tax return.

Click Here To Estimate Your Expenses For Dependent Care

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ELIGIBLE DEPENDENTS

Care expenses that can be reimbursed through the Dependent Care Flexible Spending Account include day care for:

• Children under age 13 whom you claim as exemptions on your federal income tax return
• A spouse who is incapable of caring for him- or herself
• Parents, grandparents, children age 13 or older, or other relatives or members of your household who:
  • Are claimed as a dependent on your federal income tax return
  • Spend at least eight hours each day in your home
  • Receive more than half of their support from you, and
  • Are physically or mentally incapable of caring for themselves.

If your spouse is incapable of caring for him- or herself, the expenses you incur for his or her care must enable you to be gainfully employed, and your spouse must:

• Have a physical or mental condition that does not allow him or her to take care of personal, hygienic or nutritional needs, or
• Require full-time attention for safety reasons.

The fact that your spouse is unable to engage in substantial gainful activity or perform his or her normal functions is not necessarily sufficient to qualify day care expenses for reimbursement under the plan.

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ELIGIBLE DEPENDENT DAY CARE EXPENSES

Expenses eligible for reimbursement include:

• The cost of day care provided in or out of your home (including Social Security taxes you pay on behalf of your provider) by an eligible babysitter, for example
• The cost of day care provided at a licensed day care center or kindergarten that cares for at least six people and complies with local regulations (but not services from a facility that charges no fee)
• The cost of day care provided at a summer camp (but not tuition and other fees unrelated to day care)
• The cost of day care provided at a private school (but not tuition and other fees unrelated to day care if the child is in kindergarten or above)
• Any nonrefundable fees to secure your dependent's place in a day care center
• Any other expenses that would be considered eligible for a dependent care credit for federal income tax purposes. For a complete list of these expenses, see IRS Publication 503, available from your local IRS office. Or, order a copy from the IRS by calling 1-800-829-3676.

Your day care provider can be a babysitter if his or her services enable you and your spouse to work. However, please note that your day care provider cannot be any of the following:

• Your spouse
• Your child's other parent
• Your child who is under age 19 at the end of the benefit plan year
• A person whom you or your spouse claims as a dependent for income tax purposes.
  

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INELIGIBLE DEPENDENT DAY CARE EXPENSES

The following expenses are not eligible for reimbursement under the Dependent Care Flexible Spending Account:

• Child support payments
• Clothing, entertainment or food expenses
• Day care expenses incurred during hours when you or your spouse is not working or works as a volunteer
• Expenses you incur while you or your spouse is away from work because of vacation, illness or leave of absence
• Expenses you or a family member incurred before the effective date of your Dependent Care Flexible Spending election, or change of your Dependent Care Flexible Spending election
• Expenses that are reimbursed by another plan, such as your spouse or a government plan
• Expenses you incur before you enroll in the Dependent Care Flexible Spending or after your participation ends
• Expenses you incur during any time you cannot claim your dependent as an exemption on your federal income tax return
• Expenses you incur after the end of the benefit plan year June 30)
• Finder's fees for placement of an au pair or nanny
• Full-time convalescent or nursing home expenses (except care for a mentally disabled child under age 13)
• Overnight camp expenses
• Transportation expenses for your caregiver or your dependent
• Tuition, for the first grade or beyond
• Any other expenses considered not eligible for a dependent care credit for federal income tax purposes (see IRS Publication 503 from your local IRS office).

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HOW MUCH CAN YOU CONTRIBUTE?

Each benefit plan year, you can set aside up to $96 per week ($4,992 per year) in your Dependent Care Flexible Spending. However, special limits apply if you are married, as shown in the table below:

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General

HOW OTHER BENEFITS ARE AFFECTED

Your Flexible Spending Account contributions will not affect your other Vought Aircraft benefits that are based on your pay. These other benefits, such as life insurance, disability, and retirement benefits, will continue to be based on your full pay.

However, your contributions may affect your Social Security benefits. Your Social Security benefits are based on your average annual taxable income - up to the Social Security wage base - during your entire career. Because your Flexible Spending Account contributions lower your taxable income, your Social Security benefits at retirement or disability may be slightly less if:

• You earn less than the Social Security wage base for the current year, or
• Your before-tax contributions reduce your taxable income below the Social Security wage base.
• If you earn more than the Social Security wage base, your Social Security benefits are not affected.

For most employees, the current tax savings outweigh any possible reduction in future Social Security benefits or other government related benefits.

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HEALTH CARE FLEXIBLE SPENDING ACCOUNT VS. TAX DEDUCTION

Even though the Health Care Flexible Spending reimbursements can save you money on taxes, the federal income tax deduction provide greater savings to some employees. To claim such a deduction, your health care expenses must exceed 7.5% of your adjusted gross income. Most employees find that their eligible health care expenses do not reach that level. Ask your tax advisor which method is best for your personal situation.

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DEPENDENT DAY CARE FLEXIBLE SPENDING
ACCOUNT VS. TAX CREDIT

Another way to reduce taxes with your dependent care expenses is to claim the child care credit on your federal income tax return.

Here is how the tax credit works: You can claim a 20% to 30% tax credit for child care expenses. The percentage that applies to you is based on your household income. If you have one dependent, the maximum expense that you can apply to the credit is $2,400 each calendar year. That means your annual tax saving when you use the credit can be up to $720 (30% x $2,400 = $720). If you have two or more eligible dependents, you can claim up to $4,800 in expenses, and your credit can be a maximum of $1,440 (30% x $4,800 = $1,440).

You have the option to use both the Flexible Spending Account and the tax credit approach. However, the IRS does not allow you to claim a tax credit for any expenses already reimbursed under the Flexible Spending Account. In other words, you cannot "double deduct" and receive a tax saving twice for these expenses.

Moreover, the amount of expenses that qualify for a tax credit are reduced - dollar for dollar - by the amount that you receive from the Dependent Care Flexible Spending Account. That means if you have one dependent and you contribute $2,400 or more to the Flexible Spending Account, you cannot also claim the dependent care tax credit. This rule applies even if you have additional unreimbursed expenses.

Likewise, with two or more dependents, you cannot claim a tax credit if you contribute $4,800 or more to the Flexible Spending Account. of course, smaller Flexible Spending Account contributions allow you to claim a partial tax credit.

The combination of Flexible Spending Account reimbursements and tax credits that provides the greatest tax saving for you depends on your household income, the number of your eligible dependents and your income-tax-filing status.

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Dot your I's and cross your T’s

Each time you submit your health or dependent care claims, use this checklist to ensure your paperwork is complete and to speed reimbursement of your eligible expenses

NOTE ... The claims administrator reviews your claims. However, you are responsible for ensuring that the expenses are valid IRS deductions. The claims administrator and Vought Aircraft are not responsible for verifying your claims.

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REIMBURSEMENTS

When you incur an eligible expense during the benefit plan year, you can use the money in your accounts to reimburse yourself simply complete a Flexible Spending Account claim form, attach the proper documentation, and send it to the claims administrator.

Claim forms are available by calling the Vought Benefits Center at 1-866-689-5999 and asking for a supply, or you can download forms from the Download Forms page.

Send your completed claim forms and documents to:

United Healthcare Insurance Company
Attn: FSA Unit
P.O. Box 981178
El Paso, TX 79998-1178

or fax to 915-781-1085

To ask about the status of any claim, call UHC at 1-888-567-4662 or visit their website at www.myuhc.com (for claim and account info). If you have additional questions, please call the Vought Benefits Center, 1-866-689-5999 . The Center operates Monday through Thursday 8am to 8pm and Friday 8am to 4:30pm, Central time.

Within several weeks of submitting a claim, you should receive your reimbursement check. You also will receive a statement of your account balance. Reimbursement of expenses that are less than $20 is delayed until the end of each calendar quarter.

Because your bills may arrive after you receive services, you can submit claims until September 30 - three months after the benefit plan year ends. After that, the IRS prohibits you from withdrawing your unused money, and you lose any extra funds in your accounts. This is called the "use-it-or-lose-it" rule. Vought Aircraft uses the money you forfeit to help pay administration fees for the plan.

The reimbursement process is different under each Flexible Spending Account. Here is a description of each process.

"Use it Or Lose It" Example

Assume you contributed $1,000 to the Health Care Flexible Spending Account, but you submitted only $800 in eligible expenses. You forfeit the $200 balance in your account.

In addition, you contributed $2,000 to the Dependent Care Flexible Spending Account and submitted $2,200 in eligible expenses. You would be reimbursed the full $2,000 you contributed for the year. But, you could not use the $200 you forfeited in the health care spending account to cover the remaining $200 of dependent care expenses.

Health Care Flexible Spending

When you submit your completed Flexible Spending Account claim form to the claims administrator, attach an itemized bill, a receipt, or an Explanation of Benefits for your expenses.

You can submit health care expenses and receive reimbursement for up to the amount you select to contribute for the entire year, less any reimbursements that already were paid. Your future contributions will pay off the deficit in your account.

If you or your dependents are enrolled in more than one health plan (such as your plan and your spouse's plan or Medicare), you first have to submit your expenses to those plans. After you receive reimbursement from all your health plans, you can submit the balance of your eligible expenses for reimbursement under the Health Care Flexible Spending Account. Please include the EOB from both plans with your claim.

Dependent Care Flexible Spending Account

To receive reimbursement of your eligible dependent day care expenses, submit your completed Flexible Spending Account claim form to the claims administrator. Include a bill that shows your provider's Social Security or tax identification number.

For reimbursement of the cost of day care provided by your child's school, day care must be shown as a separate item on the tuition bill. Tuition for children in kindergarten or above is not an eligible expense.

You can be reimbursed for eligible expenses up to the balance in your account at the time your claim is processed. If you have enough money in your account, you will be reimbursed in full. If you do not have enough money in your account to pay your entire claim, you will receive an initial reimbursement equal to your current account balance. The remainder of your claim will be paid automatically after you make additional payroll contributions to your account. Depending on how much you contribute each week, you may receive one or several reimbursement checks.

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WHEN PARTICIPATION ENDS

Your participation in the Flexible Spending Accounts ends and your contributions stop when the first of these events occurs:

• You or your dependents no longer are eligible under the plan, or
  
• The plan terminates.

You can submit for reimbursement claims that you incur before your participation in the Flexible Spending Accounts ends. The deadline to submit claims is September 30, three months after the benefit plan year ends.

Claims that you incur after your participation ends are not eligible for reimbursement, and you lose any money left in your accounts. However, under certain circumstances, when your coverage otherwise would end, you may continue participating in the Health Care Flexible Spending by making after-tax contributions through COBRA. When you elect COBRA, you can submit expenses for reimbursement and use the balance in your Health Care Flexible Spending during the benefit plan year.

After the benefit plan year ends, there is no tax advantage to continuing your Health Care Flexible Spending Account. So, you may want to discontinue COBRA for the Flexible Spending Account at that time.

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