USPS Flexible Spending Account (FSA) Program

RI 70-02 For Career United States Postal Service Employees

Flexible Spending Accounts (FSA) Open Season

• Enrollment for 2008 FSAs begins: November 12, 2007
• Enrollment ends: December 29, 2007 (5:00 P.M. Central Time)
• Enrollments are effective: January 1, 2008.

Who Can Enroll

Only career employees are eligible to enroll in FSAs for 2008.

What Are FSAs for and How Do They Work?

There are two types of FSAs available to you - the Health Care FSA for health care expenses and the Dependent Care FSA for dependent care (day care) expenses.

If you're like most people, you have health care expenses you pay yourself - insurance doesn't cover them. Expenses for you and your family, like prescriptions, doctor and dentist visits, vision care, even overthe- counter medical items like aspirin or bandages. Expenses like FEHB health plan deductibles or copayments. If you enroll in FEDVIP and have dental or vision insurance, amounts for non-cosmetic procedures or items that your plan doesn't cover. But your expenses aren't high enough for you to claim a deduction on your taxes.

You can get a tax break, though, by signing up for Flexible Spending Accounts (FSAs). You decide how much to contribute for 2008. Then, you contribute money every payday to an FSA, which is an account that allows you to cover your eligible health care expenses throughout the year with tax-free money. Meanwhile, whatever you contribute isn't subject to Federal income tax, or Social Security tax, or Medicare tax. Since, you get a tax break each payday, it's cheaper to pay for your health care expenses through an FSA. (Without an FSA, you pay for health care expenses using your checkbook or a credit card, and there's no tax break at all.)

You can use FSAs for dependent care (day care) expenses too, and you'll save on taxes the same way. The full amount that you sign up for is available to you beginning January 1, 2008, to cover your eligible expenses, even though FSA contributions are taken from your pay over the entire year. So, for example, if you have Lasik surgery in February and it costs you $3,000, you can withdraw the entire amount from your Health Care FSA even though you won't have had that much withheld from your pay at that time. It works the same way for the Dependent Care FSA too. Be sure to the read the FSA brochure that's mailed to you as it explains the limitations on using your FSA - for example, there are specific time limits for expenses to be eligible. You can't cover certain expenses, such as cosmetic items or procedures. And there's a deadline for filing your claims. But the brochure explains the details.

What Are the Contribution Limits?

You can contribute up to $5,000 to the Health Care FSA.

You can contribute up to $5,000 to the Dependent Care FSA

How to Enroll

To use the Employee Web - the easiest way to use PostalEASE - access the system in any of these ways:

• On the Internet at https://liteblue.usps.gov. Under "Employee Self Service," select PostalEASE.
• At an employee self-service kiosk.
• On the Intranet at http://blue.usps.gov. Under "Employee Resources," select Employee Self Service and then PostalEASE.

To use the telephone, call the Employee Service Line at 877-4PS-EASE (877-477-3273), option 1. If you have a medical condition that interferes or for another reason cannot successfully complete your transaction using PostalEASE, contact the Human Resources Shared Service Center (HRSSC) for assistance.

Details Are in the Mail

A leaflet and a brochure, FSA BK1, Flexible Spending Accounts (November 2007), with a PostalEASE FSA worksheet included, are being mailed to all career employees. If you do not receive yours by November 26, 2007, contact the HRSSC.

What if I Enroll in a High-Deductible Health Plan with a Health Savings Account?

It is very important for you to read the FSA brochure that is mailed to you this FSA open season so that you understand the rules before you sign up for a Health Care FSA. Look for the section that explains the Limited FSA.

Questions

Hotline for FSA questions: 800-842-2026.

TTY line for employees who are deaf or hard of hearing: 866-649-4869 or 866-206-7810. Advance call to hotline encouraged

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