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Understanding your flexible spending account (FSA)

Both a Health Care Flexible Spending Account (FSA) and a Dependent Care FSA may be available to benefit-eligible faculty and staff depending on your medical enrollment choices. Retirees are not eligible for an FSA.

You do not need to enroll in a medical plan to be eligible for a Health Care FSA; however, you cannot enroll if you (and/or your spouse) currently participate in a Health Savings Account (HSA). Any benefit-eligible employee can enroll in the Dependent Care FSA regardless of medical plan enrollment.

ASIFlex administers both kinds of FSA; visit our plan contacts page for provider information.


About the Account

A flexible spending account (FSA) is a tax-free account that allows you to pay for essential expenses. There are two types:

  • Health Care FSA - Use tax-free savings to pay for health care expenses that are not covered, or partially covered, by your medical, dental and vision insurance plans.
  • Dependent Care FSA - Tax-free savings can help you pay for child/dependent day care expenses. 

By contributing a portion of your paycheck to an FSA on a pre-tax basis, you save on the cost of eligible expenses you are already incurring. Using an FSA to pay for expenses can reduce your out-of-pocket costs significantly. Your personal savings will vary according to your net tax rate.

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Eligibility

Health Care FSA

You may enroll in a Health Care FSA if you are a benefit-eligible faculty or staff member enrolled in the Custom Network Plan or the PPO Plan, or if you are a faculty or staff member who is benefit-eligible but not enrolled in any university medical plan.

Faculty or staff members enrolled in the Healthy Savings Plan are not eligible for a Health Care FSA (since they have access to a Health Savings Account).

Retirees are not eligible for an FSA.


Dependent Care FSA

Any benefit-eligible faculty or staff member—regardless of the medical plan they are enrolled in—may use a Dependent Care FSA for child/day care expenses. You must enroll in a Dependent Care FSA separately from a Health Care FSA.

Retirees are not eligible for an FSA.

 

💲 Contributions

When you enroll in an FSA, you decide how much to contribute to the account for the entire plan year. Your election is binding throughout the plan year, so it is important to carefully plan your contributions and expenses.

The money is deducted from your paycheck pre-tax (before federal and state income taxes and FICA taxes are deducted) in equal amounts over the course of the plan year.

If you do not use all your contributions within the plan year (including the Grace Period for the Health Care FSA, see below), you forfeit any money left in your account. 

The university Health Care and Dependent Care FSA accounts have a 2.5-month Grace Period (through March 15 of the following year), which allows you extra time to incur expenses to use your flexible spending account balance(s) after the close of the plan year.

 

🔃 Change your contribution amount

When you enroll in an FSA, you decide how much to contribute to the account for the entire plan year. Your election is binding throughout the plan year, so it is important to carefully plan your contributions and expenses.

If you have a qualifying family status change event (such as marriage or a new baby) outside Annual Enrollment, you have the opportunity to enroll in a Health Care and/or Dependent Care FSA, or adjust your contributions, consistent with the family status change.

Your mid-year enrollment or change in the Health Care FSA or Dependent Care FSA election must be submitted within 31 day of your qualifying event, and will become effective on the first day of the month coinciding with or following the date of your change in status event, or the date on which you provide notice of the event, whichever is later. However, in the case of birth, adoption, or placement for adoption, your coverage will become effective on the date of the event provided you enroll within 31 days of that event.

 

🧾 Receiving reimbursements

After you incur expenses that qualify for reimbursement, you submit claims (reimbursement requests) to ASIFlex, the university's FSA administrator, to request tax-free withdrawals to reimburse yourself for these expenses. You may also use an ASIFlex debit card to pay for your Health Care FSA expenses; more details are in the Health Care FSA section below.

 

Health Care FSA

The Health Care FSA is an account that allows you to set aside pre-tax dollars to pay for out-of-pocket medical expenses for you, your spouse and any tax dependents. Check out ASIFlex's Health Care FSA Overview (PDF, 605KB) for additional information.

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📌 Contribution limits

Each employee/individual can set aside up to $2,750 per year in the account in both the 2021 and 2022 plan years. Your full annual election is available to you on your first day of coverage, which means that when you incur eligible expenses, you can submit reimbursement requests immediately even though the money you set aside is deducted from each paycheck, little by little over the course of the year.

 

💳 Using your Health Care FSA

Use your FSA to reimburse health care expenses for you, your spouse or any tax dependent, even if your dependents are not enrolled in your university medical, dental or vision plans. You may elect to use an ASIFlex debit card when making purchases with your Health Care FSA, providing flexibility and convenience in how and where you shop for health care-related goods and services by giving you the ability to use your FSA dollars.

For more information about this FSA and eligible expenses, review the resources in the forms and guides section below.

 

Dependent Care FSA

The Dependent Care FSA allows you to use pre-tax dollars to pay for out-of-pocket childcare and/or elder care dependent expenses. Check out ASIFlex's Dependent Care FSA Overview (PDF, 601KB) for additional information.

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📌 Contribution limits

You can set aside up to $5,000 per year ($2,500 if married and filing separately on your federal income taxes). Please note that the $5,000 is a household maximum. Your contributions to the Dependent Care FSA are deducted before federal and state income taxes and FICA are assessed, and reimbursements are completely tax free.

 

💳 Using your Dependent Care FSA

Eligible expenses include day care, babysitting, general-purpose day camps and pre-K expenses. Please note that you will be required to include your provider’s tax identification number or social security number with your reimbursement request.

Ineligible expenses include overnight camps; care provided by your tax dependent, your spouse, or your child who is under the age of 19; and care provided while you are not at work.

For more information about this FSA and eligible expenses, review the resources in the forms and guides section below.

 

Changing to/from an HSA

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💠 Previously enrolled in FSA; now enrolling in HSA

If you previously enrolled in an FSA and are now enrolling in an HSA - If you were enrolled in an FSA in one calendar year (let's call it Year One) and will be enrolled in an HSA in the next calendar year (Year Two), you will need to take special action. In order to make or receive HSA contributions at the beginning of Year Two, your previously held Health Care FSA account must have a zero balance before the end of Year One. Therefore, it is recommended that you submit claims for eligible healthcare expenses by December 24 to assure those claims will be processed before the end of Year One.

 

💠 Previously enrolled in HSA; now enrolling in FSA

If you previously enrolled in an HSA and are now enrolling in an FSA - Once money is deposited in your HSA, it is yours to keep forever. Even if you are no longer eligible to contribute to your HSA, you can still use the funds that are in it. Individuals who are enrolled in a Health Care FSA may not contribute to an HSA, but they can use funds from an HSA that they had in years prior to enrolling in an FSA. Unlike the HSA, your FSA funds must be used during the plan year, or you forfeit those contributions.

 

* In the event of a difference between this webpage and the plan document or summary plan description, the plan document and plan description prevail.

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Reviewed 2021-12-13

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