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Health Care FSA FAQs

1. What is a Flexible Spending Account?

Flexible Spending Accounts offer you a tax-effective way to pay for health care expenses not normally reimbursed by a health care plan and dependent care expenses not normally reimbursed by a health care plan and dependent care expenses incurred so you can work. There are two types of accounts in which you can enroll:

  1. Health Care Flexible Spending Account, and
  2. Dependent Care Flexible Spending Account

Participating in the FSAs is entirely voluntary. If you choose to participate, you may have just one FSA or both. The FSAs are entirely separate accounts, and you cannot transfer money between them. In certain situations, different rules may apply. At the end of the year, any money left in either FSA is forfeited.

2. Who is eligible to participate in an FSA?

Regular, full-time employees regularly scheduled to work at least 30 hours a week are eligible to enroll in an FSA. Limited-term employees are not eligible.

3. When can I enroll in an FSA?

Eligible employees can enroll in an FSA within 31 days from the date they become eligible, which is usually their date of hire. The FSA is then effective immediately and participation continues until the end of the calendar year.

Eligible employees who want to participate in an FSA must enroll each year during Open Enrollment. Open Enrollment is usually mid-October through mid-November of each year. The effective date for the FSA is January 1 of the following year.

4. How does a Health Care FSA work?

The amount you have elected is deducted from your paycheck on a bi-weekly basis and set aside in your Health Care Account. You pay your health plan expenses as usual. Then you submit a request for reimbursement along with an Explanation of Benefit (EOB) or receipts to the FSA Administrator. If approved, the FSA Administrator will then send you a check for the approved reimbursement.

5. How much can I contribute to my Health Care FSA?

For a Health Care FSA, the maximum contribution amount will change beginning January 1, 2013. Through December 31, 2012, you can contribute from $104 up to $5,000 annually. Starting January 1, 2013, you can contribute from $104 up to $2,500 annually.

6. Can I change the contribution amount at a later date?

No. You cannot change your FSA election unless you have a qualified status change as described on PDF Page 5 of the Summary Plan Description. If you have a qualified status change, then your new FSA election must be consistent with your qualified change in status.

7. Which types of medical expenses may be reimbursed through a Health Care FSA?

In most cases, a participant may be reimbursed for a health care expense which is: a) defined as a deductible expense for federal income tax purposes; b) not reimbursable by any other source; and c) not deducted on the employee's income tax return. Some examples of eligible expenses include:

  • copayments and deductible payments required by medical, dental and vision coverage
  • prescription drug copayments
  • certain over-the-counter drugs such as antacids, pain relievers, and allergy medications

For additional information about health care expenses that are considered tax deductible by the IRS, and therefore are reimbursable through Health Care FSAs, see IRS Publication 502 which is available on www.irs.gov or you may request a copy directly from the IRS by calling 800.829.3676. Consult a tax professional for further information regarding your personal financial situation.

8. How do I request a reimbursement from my Health Care FSA?

Refer to the Summary Plan Description for instructions on requesting reimbursement for your FSAs.

9. What is the deadline for submitting requests for reimbursement?

You have until March 31 of the following year to file a request for reimbursement incurred during the plan year. For example, you have until March 31, 2013 to file a request for reimbursement for expenses incurred in 2012.

10. What happens to funds in my Health Care FSA that I don't use?

As required under IRS regulations, account balances that are not used for expenses during the plan year, are forfeited to the plan. Forfeitures are used to offset the cost of plan administration.

11. Can I use the money in my Health Care FSA to help pay for dependent care expenses?

No. Contributions allocated to one benefit account can only be used to pay a claim from that benefit program. For example, your contributions to your Health Care FSA cannot be used to pay a dependent care expense.