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Insurance FAQs Flexible Spending Account

  • The maximum contribution limit for all FSAs are determined by the Internal Revenue Service(IRS). In Revenue Procedure Code 2016-55 the IRS increased the maximum contribution limit for Healthcare FSAs to $2600 in 2017. FSAFEDS has adopted this new higher limit on 1/1/2017. This change does not affect the limit associated with Dependent Care FSAs.
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  • Yes! While you are not eligible to enroll in a standard Health Care FSA, you do have the option of enrolling in the standard  Dependent Care FSA (DCFSA) and/or a Limited Expense HCFSA. The Limited Expense HCFSA allows you to set aside money, on a pre-tax basis, to pay for eligible vision and dental expenses. Visit www.FSAFEDS.com for more information.
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  • No. The IRS rule on carry over only applies to health care FSAs.  Dependent care FSAs will continue to have a grace period from January 1 to March 15 each year.
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  • On October 2013, the Treasury and the IRS modified the forfeiture (“use-or-lose”) rule for health care flexible spending accounts (FSAs).  FSA programs may now allow their participants to carry over up to $500 of unused health care FSA funds to the next plan year OR allow enrollees up to a 2-1/2 month grace period at the end of the plan year to use the funds in their flexible spending accounts. The IRS rule on carry over only applies to health care FSAs not Dependent care FSAs. FSAFEDS offers carry over for its Healthcare FSA and Limited Expense FSAs.  
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  • According to IRS regulations travel to and from a dependent care provider is not an eligible expense. For travel to and from a health care provider,  the mileage rate changes annually. To find out what the current rate is please visit www.FSAFEDS.com and see the “Mileage Worksheet” in our forms section.  If approved, FSAFEDS participants can be reimbursed for mileage and parking expenses for travel to and from your doctor, dentist, pharmacy or other medical care providers.
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  • Yes, orthodontia and braces are eligible expenses for you, your spouse, and your children under age 26 under a health care flexible spending account.
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  • You can reset your FSAFEDS username or password at www.FSAFEDS.com or by calling 1-877-FSAFEDS (372-3337). TTY Line: 1-866-353-8058
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  • You can submit your claim online by logging into My Account Summary at www.FSAFEDS.com, clicking on My Claims, and selecting Online Claim Submission. You must upload an image of your supporting documentation in .TIF, .JPG, or .PDF format with your claim information.
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  • If you are otherwise eligible for carry over it does not matter that you have switched from a HCFSA to a LEX FSA during Open Season. Next year when the carry over money becomes available to use you can submit any eligible expense under the type of  FSA account for which you are currently enrolled.  For example: If you had a HCFSA this year and elected a LEX FSA during Open Season for next year, on May 1st of next year you could use all available funds (carry over and newly elected) in your FSA towards any eligible LEX FSA expenses. However, you could not use any available funds towards expenses that would solely be considered an HCFSA eligible expense.
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  • If you are otherwise eligible for carry over it does not matter that you have switched from a LEX FSA to a HCFSA during Open Season. Next year when the carry over money becomes available you can submit any eligible expense under the type of  FSA account for which you are currently enrolled.  For example: If you had a LEX FSA this year and elected a HCFSA during Open Season for next year, on May 1st of next year you could use all available funds (carry over and newly elected) in your FSA towards any eligible HCFSA expenses. 
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  • The grace period is an additional 2 ½ months (running January 1 through March 15) during which you can incur eligible expenses that can be reimbursed from your prior year’s balance.  The grace period helps participants avoid forfeiting any of the funds deposited in their FSA account.  Dependent care accounts have a grace period every year.  The last grace period for health care accounts is January 1, 2015 through March 15, 2015.  
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  • By law, annuitants (other than reemployed annuitants) cannot participate in any flexible spending account (FSA) programs, including FSAFEDS. FSAs are a way of setting aside pre-tax salary for reimbursement of eligible expenses. Annuitants receive annuities, which are not salary. The balances in your Health Care FSA (HCFSA), LEX HCFSA and Dependent Care FSA (DCFSA)  are treated differently if you separate or retire before the end of the calendar year. Your HCFSA or LEX HCFSA will terminate as of the date of your separation or retirement. There are no extensions. Any eligible health care expenses incurred prior to the date of separation will still be reimbursed but those incurred after the separation date are not reimbursable, even if you accelerated your allotments. Your DCFSA remaining balance can continue to be used to pay for eligible dependent care expenses until your account balance is depleted or the end of the calendar year, whichever comes first. Please note, in order to take advantage of the grace period for your DCFSA, you must be actively employed and making allotments through December 31 of the Benefit Period.
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  • If you are eligible for carry over it does not matter that you switched from a HCFSA to a LEX FSA during Open Season. Next year when the carry over money becomes available for use, those funds can be used for the type of eligible expenses available with the account you are currently enrolled. For example: If you had a HCFSA this year and elected a LEX FSA during Open Season for next year, on May 1st of next year you could use all available funds (carry over and newly elected) in your FSA towards any eligible LEX FSA expenses.  However, you could not use any available funds towards expenses that would solely be considered an HCFSA eligible expense.
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  • The IRS created the "use or lose" rule, which states that all money left in your FSA is forfeited after the benefit period ends. If you don't use all of your FSA funds during the benefit period, you risk losing money. However, the HCFSA and the LEX HCFSA have Carryover, which can allow you to carry over up to $500 in unused funds into the next benefit period. Any remaining unused funds over $500 will be forfeited. To be eligible for carryover you must both:
    • Actively employed by an FSAFEDS-participating agency and contributing to a HCFSA or LEX HCFSA through December 31, and
    • Reenroll in the FSAFEDS
    A DCFSA does not have Carryover, but this account has a grace period of 2 1/2 months (January 1 - March 15) during which you can incur eligible dependent care expenses and use funds remaining in your DCFSA from the previous benefit period. You have until midnight Eastern Time on April 30 following the end of the benefit period to file claims for eligible expenses incurred during the previous benefit period or grace period. When you contribute to an FSA, you agree to reduce your salary by a specified amount and your employing agency contributes that amount to an FSA for you. Since you never received that money, you cannot be taxed on it. If you were to receive the unused amount at the end of the benefit period, the IRS would consider this "deferred compensation". Section 125 of the IRS Code prohibits deferred compensation, thus the "use or lose" rule. Your Agency cannot provide waivers for any employee regarding funds that might be forfeited. Neither OPM, nor your employing agency, has the authority to make any exception to the "use or lose" rule. To reduce your risk of losing money at the end of the benefit period, carefully estimate your expenses when choosing your annual election amount before enrolling in an FSA. Please also keep in mind that reimbursement for expenses is generally based on when an expense is incurred, not when it is paid. You can use the "Savings Calculator" on www.FSAFEDS.com to help you calculate allotments based on your individual situation, as well as indicate your potential tax savings.  If you are a Qualified Reservist, you may be eligible to request a Qualified Reservist Distribution (QRD) in order to avoid forfeiting money in your FSA account. For more information, see the HEART Act Quick Reference Guide on www.FSAFED.com.
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  • Yes.  Like general expense health care FSAs, limited expense health care FSAs have a grace period from January 1, 2015 through March 15, 2015. During this grace period, you can incur eligible expenses for your type of health care FSA and be reimbursed from your 2014 balance. This is the last grace period for health care FSAs. If you enroll in a general expense or limited expense health care FSA for 2015, you will not have a grace period.  Instead, you will be able to carry over up to $500 of unspent funds into another health care account in 2016.
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Total Count: 52, Number of Pages: 4, Page: 3
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