Insurance FAQs Flexible Spending Account

No. By IRS law, annuitants cannot participate in flexible spending accounts.  FSAs are a salary benefit and an annuity is not salary.

Participation next year depends on when you retire during the year.  By IRS law, annuitants cannot participate in flexible spending accounts.  FSAs are a salary benefit and an annuity is not salary.  You can enroll for next year and participate in FSAFEDS until the date of your retirement.  Carefully calculate your anticipated eligible expenses up to that date, because you will not be able to file claims for expenses you incur after your retirement date.  If you retire January 1st of next year then you cannot enroll in FSAFEDS.

No.  If you use your health care flexible spending account to pay for eligible expenses, you cannot deduct those same expenses from your federal income tax return.  Keep in mind that by IRS law, you are only allowed to deduct medical expenses that exceed 10% of your gross income.  The advantage of the health care flexible spending account is that you can get a tax benefit on health expenses below that threshold. 

No, flexible spending accounts are a pre-tax benefit.  By using pre-tax dollars to pay for eligible health care and dependent care expenses, a flexible spending account (FSA) gives you an immediate discount on these expenses that equals the taxes you would otherwise pay on that money. In other words, with an FSA, you can both reduce your taxes and get more for your money by saving from 20% to more than 40% you would normally pay for out-of-pocket health care and dependent care expenses with after-tax (as opposed to taxed) dollars.

No, tuition is not an eligible expense under the dependent care flexible spending accountdue to IRS rules.  However, after school care is an eligible expense as long as it is billed separately from tuition.

Yes, reemployed annuitants are eligible to enroll in FSAFEDS as long as they are employed by a participating Federal agency and in a position that conveys Federal Employees Health Benefits (FEHB) eligibility.

Travel to and from a dependent care provider is not an eligible expense. For travel to and from a health care provider, there is no mileage rate.  You submit a claim for the total expense you incurred for travel, along with documentation supporting the travel expense.  If approved, you will be reimbursed for that total expense.

Yes, you are eligible to enroll.  Because the expenses for your dependent child are eligible only until his or her 13th birthday, only put in the amount you expect to spend in eligible expenses before his or her birthday.

No, your FSAFEDS contributions are deducted in equal installments throughout the year, or you can accelerate your allotments during the beginning of the year if you choose.  You cannot begin contributing in the middle of the year unless you enroll in the middle of the year due to a Qualifying Life Event.   All of your health care FSA funds are available for reimbursement on January 1 of the benefit period.  Dependent care FSA funds, on the other hand, are only available up to the amount you have contributed to date.  

Yes, you can use FSAFEDS. Your husband will still pay a copay.Deductibles and copays that you and your eligible family members incur are reimbursable whether you use your FEHB health plan or another health insurance plan. 

No, overnight camps are not considered eligible FSA expenses.  Day camp expenses can be eligible dependent care FSA expenses if there is no overnight stay.

Yes, this is one of the few qualifying events that will allow you to enroll in an FSA outside of the annual Open Season.

Yes, your health care flexible spending account will reimburse you for their eligible expenses even when they are not covered by an FEHB health plan.

It’s the law.  Under the Affordable Care Act, the IRS requires a prescription for over-the-counter medicines and drugs to be reimbursed.  Another reason is to make sure the person prescribed the medicine or drug is the person who will use it. You do NOT need a prescription to be reimbursed for eligible over-the-counter expenses that are NOT medicines or drugs.  Some examples of over-the-counter expenses that are not medicines or drugs are band-aids/bandages, crutches and foot orthotics.