What is an FSA?
Flexible Spending Accounts (FSA) provide you with an important tax advantage that can help you pay health care expenses on a pretax basis. By anticipating your family’s health care and dependent care costs, you can actually lower your taxable income and that means you get to keep more of what you earn.
The City of Brooklyn offers a Health Care FSA and Dependent Care FSA that allows you to make deductions to pay for qualified medical or dependent expenses.
To determine if a Health Care or a Dependent Care FSA makes sense for you, estimate your eligible expected expenses for you and (if applicable) your dependents for the calendar year. This amount could be your annual election as long as it doesn’t exceed the allowed contribution maximum. The amount you elect is available to you at the beginning of the plan year, regardless of how much you have contributed via payroll deduction.
Please review the following information so you are aware of the rules applied to the Health Care FSA and the Dependent Care FSA plans. This is only a brief summary. More information is available in the Summary Plan Description (SPD).
Resources
Important points to remember:
- You may elect to contribute the maximum amount even if your spouse is also contributing to an FSA at his or her workplace.
- The Health Care FSA for 2025 has a maximum contribution of $3,300 with the maximum carryover amount of $650.
- The Health Care FSA allows any qualified medical expense to be reimbursed.
- Dependent Care FSA for 2025 has a maximum of $5,000 limit for individuals or married couples filing jointly.
After you enroll, you can’t change the amount you contribute for the year, because your election stays in effect during the entire plan year (January 1 through December 31). However, if you have a “Qualified Life Event” you may change the amount of your contribution, but the change must be consistent with the event.
The following “Qualified Life Events” may permit you to change your FSA election outside of open enrollment: a change in your legal marital status; a change in the number of tax dependents; termination or commencement of employment by you, your spouse or dependent; a change in employment status that results in gaining or losing eligibility for health coverage; and Medicare or Medicaid entitlement for you, your spouse or dependent.
