Flexible Benefits

(state and higher education employees)

State and higher education employees (excludes offline agencies) have access to a Flexible Benefits Plan. This plan is designed to help you decrease your taxable income and increase your take-home pay. Authorized under Sections 125 and 132 of the Internal Revenue Code, the Flexible Benefits Plan allows you to pay certain specific expenses from your pre-tax rather than after-tax income.

Note: Flexible benefits for state and higher education employees are only available to benefits-eligible employees; part-time employees may not enroll in these benefits.

There are four different FSA plans available:

  • Medical
  • Limited Purpose
  • Dependent Care
  • Parking and Transportation (state employees only)

Medical

Used to pay for certain medical, dental, vision and prescription costs not covered by your insurance. You do NOT qualify for a medical FSA if you are enrolled in the CDHP/HSA. Up to $500 of your unused FSA balance can be carried over into the next plan year instead of you “losing it.”

Limited purpose

May only be used to pay for certain dental and vision costs not covered by insurance. For employees enrolled in the CDHP/HSA, the limited purpose FSA is a great way to save on vision and dental expenses.

Dependent care

Used to pay for certain dependent-care costs, such as after school care, baby-sitting fees, adult or child daycare and preschool. Certain requirements must be met by the eligible employee and/or his or her spouse. For details, review the governing Plan Document located at https://www.tn.gov/finance/article/fa-benefits-publications.

Transportation and parking

State employees may set up a FSA to pay for certain work-related commuting and/or parking expenses.

Enrollment

State employees: To put money in a FSA for 2018, you must do so in Edison.

  • Medical, limited purpose or dependent care FSAs: If you were enrolled in 2017 and want to continue, you must take action to reenroll. Enrollment does not continue from year-to-year. You will enter your annual contribution in Edison. The system will calculate the amount to take out of each check based on the number of paychecks you receive each year.
  • Transportation and parking: You do not have to reenroll, and employees can enroll at any time.
  • Higher education employees: To put money in a FSA for 2018, you will do this on PayFlex’s website (stateoftn.payflexdirect.com).

CDHP Enrollment

If you are enrolled in a CDHP, you and your enrolled spouse cannot use a flexible spending account (FSA) for medical expenses. You can have a limited purpose FSA to use for dental and vision expenses. You should consider contributing the maximum allowed to your HSA before contributing to your limited purpose FSA because HSA dollars are not "use-it-or-lose-it" like an FSA.

Contributions

  • The maximum you may contribute to a medical FSA is $2,600.
  • The maximum you may contribute to a limited purpose FSA is also $2,600.
  • The maximum that a family may contribute to the dependent care FSA is $5,000 (up to $2,500 each if both spouses are working).

Please visit IRS.gov for more information.

Additional Resources