Below are some of the most commonly asked questions about FSAs. Click a topic and drill down to find the answer.
You can also find additional information in the Education Video Library.
How do I enroll?
To enroll in the Health and/or Dependent Care FSA, you simply need to fill out the Enrollment Form or enroll online, if available, before the beginning of each Plan Year.
Do I have to keep the same election each year?
No. Each year you will have to re-enroll before the beginning of the Plan Year. At that time, you will have the opportunity to evaluate the need to participate in the Plan as well as budget for all health care and/or dependent care expenses. You may decide to keep the same election, change your election or in some cases waive participation.
How do I contribute money to my health or dependent care FSA?
Once you make your annual election, your employer will deduct this amount from your paycheck in equal amounts throughout the year, before taxes are taken out.
What is a Health Flexible Spending Account (FSA)?
You may set aside pre-tax dollars to cover eligible medical expenses that are not covered by any other type of insurance. The account helps you budget for planned expenses such as deductibles, co-payments and prescriptions. You may refer to the FSA eligible expenses tool on this site for a list of eligible and ineligible expenses.
Are insurance premiums an eligible expense?
No, insurance premiums are not reimbursable from a Health FSA.
Are over-the-counter (OTCs) drugs reimbursable?
Effective January 1, 2011, Medical FSA, HSA and HRA funds may no longer be used for over-the-counter drugs and medicines (other than insulin) without a prescription from a medical provider.
If I terminate employment or retire, can I receive the remaining balance in my Health FSA?
No. However, you can continue to submit claims incurred prior to your termination date before the end of the run-out period (defined in your Summary Plan Description).
For example: Your plan has a 90-day run-out period following termination. Your termination date is September 13th. Your physician sees you on September 12th, but you do not receive the Explanation of Benefits from your insurance carrier until October 31st. You can still submit this expense as it was incurred prior to your termination date, and prior to the end of the 90-day run-out period following your date of termination. Any expense incurred after September 13 is not eligible.
If I terminate employment or retire can I be reimbursed for expenses incurred after my termination date?
No. In order to be considered an eligible expense, the expense must be incurred prior to your termination date. However, you may be able to continue your Health FSA coverage under COBRA.
What is a Dependent Care FSA?
You can use pre-tax dollars to cover eligible work-related dependent care expenses for qualified dependents, or if you are married, while you and your spouse work or your spouse attends school full-time.
Who is a qualified dependent under the Dependent Care FSA?
• Dependent under the age of 13; or
• Dependent or spouse of employee who is mentally or physically disabled and whom the employee claims as a dependent on his or her Federal Income Tax return.
Can an adult be a qualified dependent?
Yes, an adult may qualify as a dependent provided that the employee is providing more than half of that individuals support for the year, and the dependent lives with the employee and is physically and/or mentally incapable of caring for him/herself.
Do I have to use a daycare facility?
No. You can be reimbursed for expenses provided by an individual providing care for your dependent in your home as long as the expenses are incurred for you and your spouse (if married), to work, look for work or attend school full-time.
Does my daycare provider have to be licensed?
No. However, you are required to submit his/her Tax Identification Number or Social Security Number when filing your Federal Income Tax return.
Does my daycare provider have to be 18?
No, but the individual must claim the money as income on their tax return.
My child attends camp during the summer. Is this eligible?
Generally, no; however, if the camp is day camp and your dependent attends to allow you and your spouse (if married), to work, look for work or attend school full-time, then yes this would be an eligible expense. Overnight camps are specifically excluded.
When can I be reimbursed for dependent daycare expenses?
Expenses are eligible for reimbursement when they have been incurred, not when you are billed or when you pay for the services.
For example: Your daycare provider requires you to pay for the month of September on September 1st. You can be reimbursed as the services are incurred, not when you paid for the services. You can submit claims after each week, every two weeks or on October 1st.
What if I discover that I elected too much for the Health and/or Dependent Care FSA, can I change my election?
Once you make an election, you may not change your election unless you experience an IRS “Change in Status” or “qualified life event.” If you do experience a qualified life event or change in status (such as marriage, adoption, divorce, etc.) your election change must be consistent with the Change in Status event. For example, if you adopt a child then you may increase your Dependent Care FSA election due to the newly eligible dependent.
What is an IRS “Change in Status” that will allow me to change my FSA election?
• Change in legal marital status (marriage, death of spouse, divorce, legal separation, annulment)
• Change in number of tax dependents (birth, death of dependent, adoption or placement for adoption)
• Change in dependent’s eligibility
• Change in employment status of employee, spouse or dependents
• Other changes that may permit an election change under the Dependent Care FSA are:
○ Change of dependent care provider
○ Change of rate charged by unrelated dependent care provider
○ Child attaining age 13
Election changes must be consistent with the event. If you experience a Change in Status, please review your Summary Plan Description, as it will provide you with important information on the deadline for reporting this event.
If I elected too much in my Health FSA but not enough in my Dependent Care FSA, can I move money from one account to the other?
No, Health and Dependent Care FSA elections are separate. You cannot move contributions from one account to another. Also, it is very important to note that the elections you make are for the entire year. Your elections cannot be changed unless you experience an IRS Change in Status or Qualifying Life Event as noted above.
What happens if I don’t use all the money elected in my FSA?
Previously, the IRS had imposed a "use it or lose it,” rule. Any money remaining in your FSA account at the end of the plan year was forfeited. On October 31, 2013, the US Treasury Department modified its FSA “use-it-or-lose-it” provision to allow rollover of up to $500 of FSA funds remaining at the end of the plan year. Effective immediately, employers that offer FSA programs without a grace period have the option to allow employees to roll over up to $500 of unused funds at the end of the current 2013 plan year. Going forward, employers that offer FSA programs have the option of allowing participants to rollover up to $500 of unused funds at the end of the plan year or may offer a grace period, but not both. Check with you plan administrator or employer to determine whether your FSA program supports rollover of unused funds.
How do I submit a claim for the Health or Dependent Care FSA?
You must complete an FSA Request for Reimbursement Form for each Health or Dependent Care FSA claim you file. You may also submit your claim data online. When submitting your claim online, you’ll have the opportunity to either upload scanned receipts or print a fax cover page to fax in with your documentation.
May I submit expenses for my spouse and children for reimbursement through my Health FSA?
Yes, you may be reimbursed for expenses incurred for you, your spouse and any IRS dependents, regardless of where you are insured. For example, you might have coverage through your spouse’s employer’s plan (rather than your employer's) and you may still submit your family out-of-pocket expenses to be reimbursed under the Health FSA.
What supporting documentation must I submit with each Health FSA claim?
There are two main types of supporting documentation for health FSA claims:
i. Explanation of Benefits (EOB):
Each time you submit claims to your health insurance carrier, you will receive this statement detailing what the health plan will pay and what you must pay. For expenses that are partially covered under another insurance plan, you must attach a copy of both of the EOBs.
ii. Itemized Bills:
For expenses that are not submitted to another insurance plan, you must attach a copy of an itemized billing containing the following information:
- Name of patient
- Name and address of provider
- Description of service
- Date of service
- Amount of service
What supporting documentation must I file with each Dependent Care claim?
Request for Reimbursement Form: Complete the Dependent Care section of the Request for Reimbursement Form and have your daycare provider sign and date.
Receipt: The receipt must include the following information:
Name, address and Tax Identification # of provider
From/through dates of service
Amount of charge
What happens if a claim exceeds the amount currently available in my Dependent Care FSA?
The claim will be processed and approved. The amount that is currently available will be disbursed and the remaining portion will be pending reimbursement until you make another contribution. You will not need to resubmit the claim if your amount exceeds your current balance. We will pay up to the submitted amount automatically.
How do I know why my claim was denied?
You will receive an email or letter indicating the reason for the denial along with instructions for submitting the requested documentation.
Why may the amount of my reimbursement differ from the amount of my request?
There are a few reasons that you may see a different reimbursement amount. A few of these are:
1. If the request was for more than the balance of your account. For example:
Annual Election = $1,000.00
Total Amount Disbursed to Date = $700.00
Available Balance = $300.00
Total Amount of Request = $500.00
You will only be reimbursed $300.00, as this is your available balance.
2. If the request was for a dependent care claim, you may only be reimbursed for the total amount that you have contributed. For example:
Annual Election = $5,000.00
Total Amount Contributed = $1,500.00
Total Amount of Request = $2250.00
You will only be reimbursed $1,500.00, as this is the amount that you have contributed to the account. The entire request of $2,250.00 will be processed and the remaining $750.00 will be disbursed as contributions are made.
Do you know which expenses are eligible for purchase with your FSA?.
If you've made the decision that an FSA is right for you, then contact your employer.
The only way to get the maximum tax deduction for your FSA is to maximize your contributions.