FSA funds are available at the start of your plan year and can be used for eligible expenses for you and your qualified dependents.

Read on to find out how to manage your FSA, or jump to a section with these links:

  1. What is an FSA?

  2. Who can use my Healthcare FSA funds?  

  3. When are my Healthcare FSA funds available?

  4. FSA contribution limits

  5. Is my Healthcare FSA contribution limit each year per account or per spouse?

  6. Understanding my plan dates 

  7. Deadlines for using Healthcare FSA funds  

  8. Moving from an FSA to an HSA

What is an FSA?

With a flexible spending account (FSA), you can have a portion of your paycheck contributed pre-tax to pay for qualified medical expenses such as deductibles, copayments, dental, and vision.

Types of FSAs

1. Healthcare FSA

  • Funds can be used for qualified expenses including medical, dental and vision.

  • Funds are available to you on the first day of the health plan year.

2. Dependent care FSA (DCFSA) or dependent care reimbursement account (DCRA)

  • Funds can be used to pay for daycare, preschool, elderly care or other dependent care.

  • The dependent care must be necessary for you and your spouse to work, look for work or attend school full-time (along with other requirements).

  • Contributions to your DCFSA/DCRA are made per pay period, and funds will only be available for reimbursement as they are contributed.

3. Limited-purpose FSA or LPFSA

  • Operates in conjunction with a health savings account (HSA).

  • Funds can be used for dental and/or vision expenses.

4. Post-deductible FSA or PDFSA

  • Funds can be used for 213d medical expenses once a specified minimum deductible has been met.

How it works

1. Sign up through your employer

  • During eligible enrollment periods, sign up to participate in an FSA.

  • Determine the amount you would like to contribute from your pre-tax earnings.

2. Contribute

  • Your employer will have the determined amount of your pre-tax earnings contributed to your FSA.

3. Use your funds

  • When you incur a qualified expense, you can pay with a debit card (if your plan provides one) or submit the expenses online for reimbursement.

  • Remember to save all receipts; you will need them for reimbursements and to validate your expenses with your employer or administrator.

Who can use my Healthcare FSA funds?  

Under your Flexible Spending Account (FSA) plan, employees may request reimbursement for expenses incurred by any of the following people: 

  • Member 

  • Member’s Spouse  (Legally married, Filing joint tax return) 

Tax dependents, fitting the following description: 

  • Child or grandchild of the employee (regardless of age) 

  • Other child  

  • Elder parent 

  • Domestic partner (determined by employer guidelines) 

There is an Eligible Dependents tab in your account. Click on the program to view the list of your covered dependents. 

When are my Healthcare FSA funds available?  

You fund your Healthcare Flexible Spending Account (FSA) through your employer. Your entire FSA annual election amount is available on the first day of your plan year. 

  • During your company's Open Enrollment period, you tell your employer how much you would like to contribute to your account for the coming year. 

  • Your employer then deducts your contribution amount (in equal portions) from your paychecks throughout the plan year.  

FSA contribution limits

The maximum amount you can contribute is determined by the IRS. You can contribute up to $3,050 for 2023.

Your Healthcare FSA contribution limit is per account, meaning both spouses can contribute the IRS pre-tax limit in a given year.

For example, if both you and your spouse have a Healthcare FSA account, you could each choose to use them, contributing funds into your separate accounts. Or one spouse could use their account contributing up to the maximum contribution limit. Either way, your total contributions must not exceed the IRS limit for that particular year.

Understanding my plan dates 

Your Healthcare card* automatically uses your Flexible Spending Account (FSA) funds from your current plan year.

  • If you have a grace period, your card will use the funds from the previous year until they are used up or your grace period ends. Then it will use your current plan year funds.

  • You can check if you have a grace period by logging into your account and looking at your "use from" dates.

  • If you don't have a grace period, your card will use funds for the plan year you are currently in. You cannot use your current card for the previous plan year’s health expenses. 

  • The amount that's carried over is determined at the end of any run-out period for the previous plan year if your plan has the carryover option.

Check with your employer to see if they have decided to update your healthcare FSA plan based on recent COVID relief legislation.

*Your HealthEquity® Visa® Healthcare Card can be used at participating merchants who sell eligible healthcare products or services everywhere Visa debit cards are accepted. Your HealthEquity Visa Healthcare Card is issued by The Bancorp Bank pursuant to a license from Visa U.S.A. Inc. The Bancorp Bank; Member FDIC.

Deadlines for using Healthcare FSA funds  

Your Healthcare Flexible Spending Account (FSA) has an annual deadline to spend your funds. Any funds in your account at the end of the plan year will be forfeited.  

A run-out period is a timeframe in the new plan year during which you can file claims for expenses incurred in the previous plan year.

  • This timeframe is established by your employer—not the IRS. While timeframes vary from employer to employer, a 90-day run-out period is common. If your plan year ends on December 31, and you have a 90-day run-out period, you have until March 31 of the following plan year to use money left in your Healthcare FSA.  

Note: You are not able to use a current plan year card to pay for previous year plan expenses. You can file claims for reimbursement, but do not use your card. 

Check with your employer to see if your plan has any of the following options:   

  • A Healthcare FSA with Carryover is a type of Healthcare FSA that may be offered by your employer. With this type of Healthcare FSA, you can carry over up to $610 (depending on your employer’s plan) remaining in your account from one plan year to the next.  

  • A grace period is a timeframe in the new plan year during which you can incur new expenses and file claims. This timeframe, established by your employer, is up to 2½ months after the end of the plan year. If your plan year ends on December 31, and you have a grace period, you have until March 15 to incur new expenses and use money left in your Healthcare FSA to pay them.

Check with your employer to see if they have decided to update your healthcare FSA plan based on recent COVID relief legislation.

Moving from a Healthcare Flexible Spending Account to a Health Savings Account

What you need to consider when switching from a Healthcare Flexible Spending Account (HCFSA) to a Health Savings Account (HSA)

  1. Determine your eligibility for an HSA:

    1. You have a high-deductible health plan (HDHP) with an annual deductible of at least $1,500 for individual coverage and $3,000 for family coverage.*

    2. Your high-deductible health plan out-of-pocket limits do not exceed $7,500 for individual coverage or $15,000 for family coverage.*

    3. You are not covered by Medicare.

    4. You don’t have another disqualifying coverage, such as a spouse’s HCFSA or a Health Reimbursement Arrangement (HRA) provided by your employer, and the HDHP is the only health insurance coverage you have. You are also ineligible for an HSA if you have Medicaid or Department of Veterans Affairs benefits.

    5. You cannot be claimed as a dependent on another person’s tax return.

    6. You must be 18 years old or older to open an HSA.

*Figures are current for 2023.

2. Spend down all your current plan year HCFSA funds in order to start contributing to your HSA:

a. You must spend all your HCFSA funds before the end of your plan year and must have submitted any claims and received reimbursements prior to contributing to an HSA.

b. Generally, you must have a $0 balance by the last day of your prior plan year if the plan offers a carryover or grace period to spend unused HCFSA balances, causing you to be ineligible to contribute to your HSA.

3. Be aware of HCFSA carryover:

a. An HCFSA with carryover automatically transfers your unused HCFSA funds, up to an statutory limit, to a HCFSA for the upcoming plan year. This means that if you have unused HCFSA funds on the last day of your plan year they may automatically be re-enrolled in an HCFSA for your upcoming plan year.*

b. Once you are enrolled in an HCFSA, you are considered to have disqualifying coverage and you are no longer eligible to contribute to an HSA.

c. Carrying over any unused HCFSA funds to an upcoming plan year means that you are not eligible to contribute to an HSA in your upcoming plan year.

d. To transition from a plan year with a HCFSA to a new plan year with an HSA you must

i. Have a $0 balance in your standard HCFSA on the last day of the prior plan year or

ii. If permitted by your employer, have your HCFSA balance converted to a Limited Health Plan Flexible Spending Account (LPFSA) on the first day of the new plan year.

*https://www.ebcflex.com/hsaeligibilitypart1/#:~:text=During%20this%202%20month%20and,when%20their%20balance%20is%20exhausted.

4. Be aware of the HCFSA Grace Period:

a. A HCFSA with a grace period offers you up to 2 months and 15 days after the end of your plan year to incur and be reimbursed for eligible medical expenses. This grace period may be available if you have any unused HCFSA funds in your account on the last day of your plan year. Confirm with your plan for details related to an applicable grace period.

b. Participants who make use of a grace period with their HCFSA are considered to have disqualifying coverage and are not eligible to contribute to an HSA until their applicable grace period has ended.

c. This means that participants who utilize this grace period are not able to contribute to an HSA until the first of the month following the end of their grace period. 

i. For example: Assume your plan design provides a 2½-month grace period. If it began on January 1, then it would be in effect until March 15th, and a participant would not be eligible to contribute to an HSA until April 1st.

5. Consider employer contributions

a. If your employer contributes to your HSA, through seed or matching funds, the employer contribution is combined with your contribution when calculating your contribution limit.

i. For example, an individual under age 55 whose employer contributed $500 could then contribute $3,350 in order to reach the 2023 individual maximum limit of $3,850.

Note that HSAs may be used along with plans such as an LPFSA, Dependent Care Flexible Savings Account (DCFSA), Commuter Benefits, or a post-deductible HRA.

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