When you decide to enroll in FSAFEDS each
year during Open Season, you first need to determine how much
money you want to elect for your account(s) for the upcoming
Benefit Period. The maximum you can elect for a Benefit Period
is $5,000 per account (HCFSA or LEX HCFSA and/or DCFSA).
However, your election for a DCFSA can only be $2,500 if you
are married, but filing separately. The minimum annual amount
you can elect is $250 per account. Most people review their
current year expenses, think about expenses they may incur in
the 2-1/2 month grace period, and take into account changes
that will occur in the coming year when making their annual
elections. You have 14-1/2 months to use up your annual
election, so you may wish to contribute more than you expect
you’d spend in one year. However, you will also forfeit any
monies you don’t use within those 14-1/2 months, so plan
carefully. You can find our savings calculator
) to help you
decide how much to elect for your FSAs.
Once you have decided on
your annual election, you formally enroll in a HCFSA, a LEX
HCFSA, a DCFSA, or a combination of accounts (you cannot have
a HCFSA and a LEX HCFSA), and you specify your annual
election(s) — that is, how much money you want to have
deducted from your pay and deposited into your account(s)
during the upcoming year, for you to use during the upcoming
Benefit Period. SHPS is the Third Party Administrator that
oversees the day-to-day administration of FSAFEDS. You can
enroll online during Open Season at www.FSAFEDS.com or if you have
questions you may contact an FSAFEDS Benefits Counselor,
toll-free, at 1-877-FSAFEDS (372-3337), TTY: 1-800-952-0450,
Monday through Friday, from 9:00 A.M. until 9:00 P.M., Eastern
Time.
After you make your election for the Benefit Period, FSAFEDS directs BENEFEDS to deduct your annual election(s) in installments, called allotments. The allotments are spread evenly over the number of pay dates remaining in the Benefit Period. In certain circumstances, you may be approved to have your allotments accelerated so your annual election is taken over a lesser number of pay periods. You can accelerate your allotments during enrollment for reasons such as the two listed below:
Even though your enrollment may be effective, FSAFEDS will not be able to pay your claims until your employment is confirmed with your employing agency or its payroll provider. On occasion, reimbursements are delayed because of problems in setting up payroll deductions. These delays may be caused by incorrect data that was provided during enrollment, such as the wrong Social Security Number or employing agency.
No. On November 24, 2003,
President Bush signed the National Defense Authorization Act
into law. Section 1127 of this law (Public Law 108-136)
requires agencies participating in FSAFEDS to cover the
administrative fee(s) on behalf of their enrolled employees.
Some Federal agencies do not
participate in FSAFEDS, but may offer their own FSA program to
their employees. These agencies include:
How does a Health Savings
Account (HSA) affect my FSAFEDS eligibility?
Your health plan credits a
portion of the health plan premium to your HSA. You have the
option to make additional tax-free contributions to your
account, so long as total contributions do not exceed the
limits established by law, generally the plan deductible. The
funds can be used to pay for your plan deductible and/or
qualified medical expenses that do not count towards your
deductible. Deductibles are as follows: annual deductible of
at least $1,150 for self, or $2,300 for family coverage.
An HSA is similar to an
HCFSA in that they are funded with pre-tax salary dollars that
can be used for the same type of health care expenses. There
is a significant difference between the two. With an HSA, you
must be in an HDHP which allows you to rollover funds from
year-to-year — therefore, you are not at risk of losing unused
money. You can be in any type of FEHB plan including a HDHP
(or no plan) and have a HCFSA. However, with an HSA, you are
no longer eligible for a “general purpose” HCFSA because both
are used to pay for the same type of expenses. You are
eligible for a LEX HCFSA
if you are enrolled in a HDHP with an HSA. The LEX HCFSA
allows you to set aside pre-tax salary dollars to pay for
eligible dental and vision expenses only.
Regardless of the type of
health plan in which you choose to enroll, you may still be
eligible for a Dependent
Care FSA which allows you to set aside pre-tax salary
dollars to pay for child care and elder care for those
individuals you can claim on your Federal Tax return.
FSAFEDS is not involved in
the FEHB HDHP offering, so if you have questions regarding HDHPs
and/or HSAs visit http://www.opm.gov/hsa.
Do I have to give FSAFEDS
my Social Security Number to enroll?
Yes. A flexible spending
account sets aside part of your salary before taxes. Since
this is a payroll action, your Social Security Number is
required to enroll. If you do not provide your Social Security
Number, your election will not be able to be matched with your
payroll provider and the deduction will not be taken from your
pay, thereby voiding your election.
As part of your enrollment,
you must choose a UserID to use when checking on your personal
account(s) via the FSAFEDS web site, using the interactive
voice response system by phone, or speaking with an FSAFEDS
Benefits Counselor.
Whenever you enroll in the
program (i.e., if you enroll after Open Season, or if you are
a new employee or a newly-eligible employee joining FSAFEDS in
mid-year), your annual allotment will be divided by the number
of pay periods remaining in the calendar year. For example, if
you elect $2,000 and your agency has 26 pay periods in the
calendar year, your allotment would equal $76.92 per pay
period. You also have the option to accelerate your
allotments if you think that you may go into a leave without pay status
and/or be paid only during certain months of the year.
The FSAFEDS Benefit Period
runs from January 1 of the current year through March 15 of
the following year.
Under IRS tax rules, you
forfeit any money for which you did not incur an eligible
expense under your FSA account(s) during the Benefit Period.
This is known as the “use or lose” rule. 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 can’t 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. Agencies
cannot provide waivers for any employee regarding funds that
might be forfeited. The “use or lose” rule is why
you should plan carefully, and conservatively, when making
your annual FSA election. Also remember that reimbursement for
expenses is generally based on when an expense is incurred,
not when it is paid.
A Qualifying Life Event is
an event defined by the Internal Revenue Service in Section
125 that allows you to change your FSA election. FSAFEDS permits all QLE's defined by the IRS. These QLEs include:
If you or your dependents experience a QLE, you may enroll or change your current election(s) in the FSAFEDS Program; however, your requested change must be consistent with the event that prompted the election change. For example, if you adopt a baby, you may want to increase your HCFSA and/or DCFSA elections to accommodate the added medical expenses and/or daycare costs you may incur for this adopted child. However, in general, you could not decrease your DCFSA elections for that QLE. You may wish to decrease your DCFSA, for example, if your spouse decided to stay home with your child and you no longer had eligible daycare costs.
If your requested change is due to the birth or adoption of a child, the change will be retroactive to the child’s date of birth, date of adoption, or placement for adoption, consistent with the requirements of the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
If you are a Federal employee and experience a QLE, such as the death of your spouse, you may enroll in the FSAFEDS Program.
Additionally, you cannot reduce your HCFSA, LEX HCFSA or DCFSA election(s) below the amount already reimbursed or already in your account.
After September 30 of any Benefit Period, only those QLEs resulting in a decrease in the annual election will be considered. QLEs resulting in an increase in the annual election will not be accepted due to the limited number of pay periods remaining in the calendar year.
You can check your account
status, including account balance, claim information, last
reimbursement, and update your demographic information via the
Internet or by our automated phone system 24-hours-a-day, 7-days-a-week.
FSAFEDS also keeps you
up-to-date on your account via the reimbursement statements
that are generated each time you submit a claim. How and when
you receive the statement depends on whether:
Here is a summary of the
different ways that a reimbursement statement will be provided
to you:
If your claim is denied in
part or in full, your reimbursement statement will include
information on what you need to do to have your claim
reconsidered. This statement will include an ineligible code(s)
along with an explanation of why your claim was denied. Of
course, you can review all your account activity at any time
by going to My Account Summary and selecting
“My Claims” on the FSAFEDS web site.
FSAFEDS has a minimum
reimbursement threshold of $25.00. If your claim does not
total $25.00, it will be processed and you will receive a
reimbursement statement, but your payment will be pended until
you submit another claim and reach the $25.00 aggregate
amount, or until the end of the quarter, whichever comes
first.
In addition, FSAFEDS will
send your account statement (via email, if you have provided
your email address) no later than October during the Benefit
Period, which will give you a current account summary, and again in
late January (the 13th month of the Benefit Period). If you
still have a balance in your account in March, we will send
you another statement reminding you to submit all claims for
the Benefit Period no later than April 30.
You have the right to
appeal any FSAFEDS denial that involves your Health Care,
Limited Expense Health Care, and/or Dependent Care Flexible
Spending Account, including:
If you disagree with our
decision, or do not understand why your claim for
reimbursement had been denied in part, or in full, you may
contact an FSAFEDS Benefits Counselor within 30 calendar days from the
date of the decision to request a more detailed explanation.
You may contact FSAFEDS via email, telephone, fax or mail:
If you do not agree with our
decision to uphold the denial, FSAFEDS will allow an
additional 30 calendar days for you to file another appeal for
reconsideration, in writing. Upon receipt of the appeal, the FSAFEDS
Appeals Committee meets to review and ensure that the appeal
has been handled properly, which includes a claims processing
review, any additional documentation submitted by the
participant in writing and processing and communication
timeframes. We respond to all second-level appeals within 30 calendar days from the date we receive your request.
If the FSAFEDS Appeals
Committee approves the reimbursement, we will send you an email informing you that your claim will be processed for reimbursement.
If the FSAFEDS Appeals
Committee does not approve the reimbursement, we will send you a letter informing you, based on the information provided why your claim does not meet IRS or Plan guidelines for
reimbursement. The letter will also state that you have the right
to file a final appeal with FSAFEDS within 30 calendar days. This final appeal will be forwarded
to an Independent Third Party for review.
The Independent Third Party
reviews all documentation submitted by you, and has
30 calendar days from the date the final appeal is received
to review and respond in writing. This decision is final and binding on all parties.
No further appeals will be considered.
How do I know if I am
eligible to participate in a HCFSA or LEX HCFSA?
If you are eligible for
the Federal Employees Health Benefits (FEHB) Program and are an
active employee of the Executive Branch or of another agency
that participates in FSAFEDS, you are eligible to participate
in a health care FSA with FSAFEDS. You need only be
eligible to participate in FEHB — you do not need to be currently
enrolled. There is no household limit on the amount of money
that you can set aside for a HCFSA or LEX HCFSA, although the
FSAFEDS limit per Federal employee is $5,000 ($10,000 for a
“Federal couple”). If your spouse is not a “Fed”, and has
access to an FSA, he or she may enroll up to the maximum of
his or her own company’s health care account.
A LEX HCFSA is for employees enrolled in a Federal Employees Health Benefits (FEHB) Program High Deductible Health Plan (HDHP) with a Health Savings Account (HSA), or whose spouse is enrolled in a non-FEHB HDHP with an HSA. The LEX HCFSA is limited to eligible dental and vision expenses only. Under IRS rules, you are not eligible to contribute to an HSA and be enrolled in a FSAFEDS general purpose HCFSA at the same time. Go to http://www.opm.gov/hsa if you want to learn more about HDHPs and HSAs.
Under the IRS Code,
annuitants (other than re-employed annuitants) cannot
participate in an FSA. An FSA is a way to set aside part of
your salary – before taxes – for payment of eligible expenses.
An annuity is not considered salary.
If you are an active
employee of the Executive Branch or of another agency that
participates in FSAFEDS, you are eligible to participate in a
DCFSA with FSAFEDS. The only exception(s) are intermittent or
“when actually employed” (WAE) employees who are expected to
work less than six months in a calendar year. Also, there is a $5,000 household limit ($2,500 if married, filing separately) on the amount that can be set aside in a DCFSA. It’s very important to discuss your elections with your spouse to ensure the household limit is not exceeded. If you and your spouse elect more than the $5,000 household limit, FSAFEDS will not be able to cancel your election per IRS guidelines. You will need to resolve the over-deduction through your federal income tax return.
Under the IRS Code,
annuitants (other than re-employed annuitants) cannot
participate in a DCFSA. An FSA is a way to set aside pre-tax
salary for payment of eligible expenses. An annuity is not
considered salary.
To be reimbursed through
your DCFSA for child and dependent care expenses, you must
meet the following conditions:
Eligible participants for
a HCFSA and LEX HCFSA are those Federal employees eligible to
enroll in the FEHB program. Temporary Federal employees are
eligible only upon completion of one year of continuous
service with the government.
Yes. Eligibility for the
FEHB Program is the key. You need not be enrolled in FEHB to
elect a HCFSA or LEX HCFSA.
No. By law, annuitants
(other than re-employed annuitants) cannot participate in
FSAs. FSAs are a way of setting aside pre-tax salary for
payment of eligible expenses. Annuitants receive annuities,
which are not salary. Re-employed annuitants must be eligible for active FEHB coverage.
No.
If your period of LWOP is
related to a QLE, you have the additional option of canceling
your election for the remainder of the year and reducing your
coverage to the amount deposited as of the start of your
leave. Expenses you incur during your leave will not be
eligible for reimbursement under any of your FSAs.
If you go on non-pay status during the Benefit Period,
and have not pre-paid your allotment, your FSA account will be frozen and
you will not be eligible for reimbursement of any health care expenses
incurred during that period, even if your employer continues to pay your
FEHB premiums for medical coverage.
Your options for coverage while you’re on non-pay status
are the same as those for someone on Leave Without Pay (LWOP).
You may accelerate your allotments prior to going on non-pay status,
or your account will be frozen until you return to pay status and
your allotments are successfully restarted (in which case, we would
recalculate your allotments based on the number of pay periods remaining
in the Benefit Period).
However, if you have a DCFSA, dependent care expenses you
incur during your leave that meet IRS guidelines for eligible expenses
i.e., you must incur the expenses in order to allow you and your spouse
to work or attend school) may be reimbursed up to your account balance.
When you return to pay status, we will recalculate your allotments based
on the number of pay dates remaining in the Benefit Period.
The balances in your
HCFSA, LEX HCFSA and DCFSA are treated differently if you
separate or retire before the end of the Benefit Period. In order to take advantage of the grace period for any account, you must be actively employed and making allotments through December 31 of the Benefit Period.
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. If you used your entire elected amount
before FSAFEDS has deducted it from your pay, you will not
be responsible for the remaining allotments.
You can continue to use the remaining balance in your DCFSA to pay for eligible
dependent care expenses until the end of the Benefit Period or
until your account balance is depleted, whichever comes first.
No. You can only be
reimbursed for the expenses incurred prior to the date of
separation/retirement. You are not eligible for reimbursement even if there
is still money in your HCFSA or LEX HCFSA to pay these
expenses.
Your previous election
will be reinstated as long as you return to work for an agency
that is covered under FSAFEDS within 60 days of your
separation and before the end of the same Benefit Period. You
may not change the amount of your election, unless you have
experienced a QLE during that time of separation. You must
notify FSAFEDS within 60 days of the event. If you return in a
subsequent Benefit Period, you will have an opportunity to
make a new election. It is your responsibility to notify
FSAFEDS if you are leaving, transferring, or re-joining a
Federal agency that participates in FSAFEDS. Please contact
FSAFEDS as soon as possible at 1-877-FSAFEDS (372-3337), TTY:
1-800-952-0450, Monday through Friday, 9:00 A.M. until 9:00
P.M., Eastern Time, and provide us with this information to
ensure a seamless transition.
Eligible employees can
enroll in FSAFEDS for the upcoming Benefit Period during the
Federal Benefits Open Season that is held each year during November and
December. Enrollment
in an FSA is completely voluntary. You
must choose to enroll each year – your participation will not
automatically carry over from year-to-year.
While the FSAFEDS Open
Season coincides with the Federal Benefits Open Season, it is administered
very differently. Your employing agency does not play a part
in the FSAFEDS enrollment process. You enroll directly with
FSAFEDS, either through their web site, www.FSAFEDS.com, or by calling an
FSAFEDS Benefits Counselor. To enroll in FSAFEDS via the
Internet, go to www.FSAFEDS.com and click on Enroll. If you have questions
during the enrollment process, contact an FSAFEDS Benefits
Counselor, toll-free, at 1-877-FSAFEDS (372-3337), TTY:
1-800-952-0450, Monday through Friday, 9:00 A.M. until 9:00
P.M., Eastern Time. FSAFEDS Benefits Counselors can also
enroll you over the phone if you do not have access to the
Internet.
After you enroll, you have
the opportunity to print your confirmation for your records or
save it to your PC. You will also be able to access your
confirmation statement via My Account Summary. You should take the time to review your
election(s) and make any changes before Open Season ends. If
your election is incorrect (perhaps you entered the wrong
amount for your allotment, or you enrolled in a DCFSA when you
meant to select a HCFSA), you can correct your election by
contacting an FSAFEDS Benefits Counselor at 1-877-FSAFEDS
(1-877-372-3337), TTY: 1-800-952-0450, Monday through Friday,
9:00 A.M. until 9:00 P.M., Eastern Time. Once Open Season
ends, you cannot change your enrollment unless you experience
a Qualifying Life Event.
Since all FSA elections
must be made prospectively, the Belated Enrollment is
effective the day after your election has been accepted by
FSAFEDS and cannot be changed unless you experience a Qualifying Life Event. Claims for
services rendered prior to the enrollment effective date will
not be paid.
If you are a new or newly
eligible employee* you have 60 days from your entry on duty
date to enroll in FSAFEDS, but you must enroll prior to
October 1 of any Benefit Period. If you do not enroll before
October 1 you cannot participate for the current Benefit
Period. You can elect an FSA for the next Benefit Period
during the Federal Benefits Open Season beginning in November.
If you enroll in FSAFEDS
with a Belated Enrollment or as a new/newly eligible employee,
your election will generally be effective the next day after you enroll, but not before January 1. You may elect
up to the full amount for the HCFSA and DCFSA. Only expenses incurred on or after your
effective date through the end of the Benefit Period are
eligible for reimbursement.
Your election will be
effective January 1 of the Benefit Period for an HCFSA, LEX HCFSA or
DCFSA.
Your effective date will begin the next
day after you enroll and continue through the “grace
period” ending March 15 of the following year. For example, if
you enroll on January 5, your Benefit Period would be January 6
through March 15 of the following year. No one can enroll on
or after October 1 for any current Benefit Period. Only expenses incurred on or after
your effective date through the end of the Benefit Period are eligible for
reimbursement.
In some cases, reimbursements can be delayed because of problems in setting
up payroll deductions. BENEFEDS will notify you if there is a problem verifying your employment. It is important that you respond in a timely manner.
Yes, there is an annual
open season. Open Season for FSAFEDS is always held
concurrently with the Federal Benefits Open Season from mid-November to
mid-December. Your elections during Open Season are effective
for the Benefit Period that follows. For example, your
elections in the Open Season during November/December of 2008
will be effective for the Benefit Period 2009 (January 1, 2009
– March 15, 2009).
Yes, you may change your
election and allotment amount as often as you want during the
Open Season timeframe. Your last change as of midnight on the
day that Open Season ends becomes your final election.
The following chart
summarizes when your election is effective:
| If you enrolled |
Your
enrollment, or enrollment change, must be submitted
|
Your election is effective |
You
may change your election |
| During Open Season
|
By midnight on the
last day of Open Season |
January 1 of the
following year |
Until the last day
of Open Season |
| Belated |
By midnight of the
day the Belated Form is submitted. |
The next day after your election is received and approved by
FSAFEDS |
If you experience
a QLE, or the next Open Season |
| As a new/newly
eligible employee, within 60 days of becoming eligible, before October 1
|
Enroll within 60
days of becoming eligible. Any changes must be submitted
by midnight of the day sent. |
The next day after your election is received by FSAFEDS |
If you experience
a QLE, or the next Open Season |
| As a result of a
QLE, before October 1 |
A QLE must be
submitted 31 days before to 60 days after the date of
the event |
The first day of
the first pay period that starts after approval of the
Qualifying Life Event and verification of the event by
FSAFEDS. If the change is requested due to the birth or
adoption of a child, the change will be effective
retroactively to the date of birth or placement for
adoption. |
If you experience
a second QLE, or the next Open Season |
| As a result of a
QLE with a decrease in your election, on or after October 1 |
A QLE must be
submitted 31 days before to 60 days after the date of
the event |
The first day of
the first pay period that starts after approval of the
Qualifying Life Event and verification of the event by
FSAFEDS. If the change is requested due to the birth or
adoption of a child, the change will be effective
retroactively to the date of birth or placement for
adoption. |
If you experience
a second QLE, or the next Open Season |
Back to
Top
I did not enroll in a
HCFSA, LEX HCFSA or DCFSA during Open Season. Will I have an
opportunity to enroll at a later date?
Back to
Top
Can I elect to allot
money to a DCFSA but not a HCFSA or LEX HCFSA, or vice-versa?
Yes. You can enroll in
only one of the accounts.
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Can I still enroll in
FSAFEDS if I do not have a bank account?
Yes. If you do not have a
bank account you may still enroll in FSAFEDS. To enroll,
contact an FSAFEDS Benefits Counselor at 1-877-FSAFEDS
(372-3337), TTY: 1-800-952-0450. You will need to provide
evidence that you do not have a bank account or that your
banking institution does not accept Electronic Funds Transfer
(EFT). You would need to provide a statement from your bank
or show that you receive hard copy paychecks from your payroll
provider.
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What is BENEFEDS and is it related to FSAFEDS?
BENEFEDS is the administrative system authorized by the Office of Personnel Management
to handle payroll deduction functions for FSAFEDS as well as the Federal Employees Dental and Vision
Insurance Program (FEDVIP). BENEFEDS works directly with SHPS, the third party administrator for FSAFEDS,
and Federal agencies to process payroll deductions of your FSAFEDS allotments.
Why would BENEFEDS contact me?
BENEFEDS will try to contact you if they require additional information in order to process allotments on behalf of FSAFEDS, or to notify you of a change in
regards to your allotments. The reasons they would send a communication include:
- a change in your annual elections due to a Qualifying Life Event
- one or more missed allotments
- you just returned from a period of Leave Without Pay
If information is required, you need to respond to BENEFEDS promptly in order to prevent suspension of your account.
I received an email and/or letter from BENEFEDS and don't know how to respond to it.
Please be assured that emails or letters you send to, or receive from BENEFEDS are legitimate
and the information received is used solely to establish your FSAFEDS account.
How do I contact BENEFEDS if I need to ask a question?
You can call BENEFEDS toll-free at 1-877-888-FEDS (1-877-888-3337), Monday through Friday.
You may also find additional information about BENEFEDS at their website
www.BENEFEDS.com.Is there a maximum or
minimum amount that I can allot for a flexible spending
account?
The maximum annual
election is $5,000 for the HCFSA and $5,000 for the LEX HCFSA.
The DCFSA maximum annual election is $5,000.00 per household
or $2,500.00 if married, filing separately. The minimum annual
election for Health Care FSA, Limited Expense FSA and
Dependent Care FSA is $250.00.
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My spouse has an FSA
program at work too. Can I still contribute the full $5,000 to
the HCFSA even if my spouse is contributing at his/her
workplace?
Yes, you can. There is no
household limit on the amount that can be set aside for a
Health Care Flexible Spending Account or Limited Expense
Health Care Flexible Spending Account. The only limits are
based on specific plan limits; for instance, in FSAFEDS
you can elect a minimum of $250 and up to $5,000 for either account.
Back to Top
My spouse has an FSA
program at work too. Can I still contribute the full $5,000 to
the DCFSA even if my spouse is contributing at his/her
workplace?
No. The total that each family can elect for a Dependent Care FSA must not exceed $5,000 per
household ($2,500 each if married and filing separately) in
accordance with IRS rules. Therefore, you must ensure that you
and your spouse limit your individual elections to total no
more than $5,000 combined.
A DCFSA allows you to be reimbursed on a pre-tax basis for childcare or adult dependent care expenses for qualified dependents that are necessary to allow you or your spouse to work, look for work, or attend school full-time. You (and your spouse if you are married) must have earned income during the year. Under Internal Revenue Code Section 129 (see sections 129(a)(2)(A) and 129(b)(1)), the maximum amount that can be elected for a DCFSA is limited to the lesser of:
- $5,000 for single individuals or married couples filing joint returns;
- $2,500 for married couples filing separate returns,
- the employee's earned income (if less than $5,000/$2,500) or
- the spouse's earned income (if less than $5,000/$2,500).
Back to Top
Can I cancel my FEHB
enrollment and elect to have the Government contribution
toward FEHB premiums paid into my FSA instead?
No, you cannot. There is
no provision to allow this.
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Top
If I elect to contribute
to both a Health Care FSA or Limited Expense Health Care FSA
and a Dependent Care FSA and I exhaust all of my health care
money, can I use my dependent care account to pay for health
care expenses?
No. The Health Care,
Limited Expense Health Care and Dependent Care FSAs are
separate accounts and money cannot be transferred between or
among them, nor can claims be reimbursed that are not
consistent with the expense eligibility requirement for each
account.
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Top
If I didn't use all the
money allotted to my FSA during the year, can I get the money
refunded to me?
No, the IRS specifically prohibits this. Participants have
until March 15 of the following year to incur eligible
expenses and money remaining in your account after that date
will be forfeited. You will forfeit
any money not claimed by April 30 following the end of the Benefit Period.
This is the major reason employees need to be conservative in
their estimate of how much money to allocate to an FSA.
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Can my agency provide a
waiver for me to recoup any funds remaining in my flexible
spending account?
No. Your agency does not
have the authority to provide waivers for you or any employee
regarding funds that may be forfeited. Getting reimbursed for
monies remaining in your FSAs after the Benefit Period ends is
considered deferred compensation and therefore expressly
prohibited by IRC Section 125. Please see the FAQ titled "
What
is the use or lose rule?” for more
information about the use or lose rule.
What happens to the
forfeited money?
For
FSAFEDS, forfeited funds are set aside to offset future
administrative costs incurred by SHPS for administering the
program for the Federal government.
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Is the money I elect to
an FSA insured in any way? What if SHPS (the Third Party
Administrator of FSAFEDS) goes bankrupt?
FSAFEDS allotments do not
belong to SHPS - they belong to the Plan. As the
administrator, SHPS collects and maintains your allotments in
a separate concentration bank account insured by the Federal
Deposit Insurance Corporation (FDIC) and dedicated
specifically to FSAFEDS. This money is completely separate
from SHPS' operation accounts, and is not part of SHPS'
assets. If SHPS were to declare bankruptcy, FSAFEDS funds
would still be available, and would not be subject to SHPS
creditors’ claims. The money would be transferred to the FSA
administrator that replaced SHPS. This scenario is very
unlikely as SHPS is one of the largest FSA administrators in
the country and financially strong.
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Do I have to submit all
my claims before the end of the year?
No. You have until April 30 following the end of the Benefit Period to submit health care and dependent care
claims. Generally, all eligible expenses must be incurred by
March 15 of the following year regardless of when they were
paid. For example, if you visit the dentist on February 28
but do not pay until March 18, the eligible expenses for this
visit are reimbursable. An exception to the general rule is
made for expenses for services that are sometimes pre-paid,
such as initial payments for orthodontia expenses.
For more information, refer to the FAQ titled "What is the FSAFEDS Grace Period?"
What if my agency
withholds the wrong amount? What happens then?
If you notice an error
regarding your allotment, you should notify FSAFEDS. FSAFEDS
will work with BENEFEDS to determine the required course of
action.
If the error results in the
allotments being less than your scheduled amount, your allotments will be recalculated based on the number of pay dates
remaining in the Benefit Period.
Example:
Let's say you elected
$2,600 for the Benefit Period to be deducted over 26 pay
periods, resulting in a per pay date allotment of $100.
Then, your payroll provider fails to withhold your scheduled
allotment on pay period 9 ($800 already deducted). That leaves
$1,800 of the $2,600 to be deducted from your pay for the rest
of the year. We would recalculate your allotments by spreading
the remaining $1,800 over the remaining 16 pay periods. Your
"new" allotment would be $112.50 per pay period so that your
account is funded in full by the last payday of the year.
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Are there any negative
factors to the tax savings through an FSA?
While almost all
employees benefit from the tax savings, your pre-tax
contributions may slightly reduce your Social Security
benefits at retirement. However, the value of your current
year tax savings will more than offset the very slight
reduction in Social Security benefits that occurs in future
years. While it does not compute Social Security benefits, the
FSAFEDS Calculator will allow you
to view your potential tax savings.
I have switched to a different bank account. How long
will it take for my reimbursement statements to be transmitted via Electronic Funds Transfer (EFT)
my new account?
If your banking information changes, you may update it by logging into
"My Account Summary" and choosing EFT Information from the left-hand menu. Once you submit your new account information,
please allow 10 business days for the change to go into effect.
In some instances, we may receive a Notice of Change (NOC) from your banking institution indicating that a portion of your
banking information has changed, such as a routing number. In this case, the change would take place up to 10 business days from the date
that we make the update. There is a possibility that you may receive your reimbursement via a paper check in the meantime.
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What is a Health Care
Flexible Spending Account?
A Health Care FSA (HCFSA)
helps you pay for eligible health care expenses that are not
covered or reimbursed by FEHB, FEDVIP or any other insurance. A HCFSA is not insurance,
but it can help you get more for your money by using pre-tax
dollars to stretch the money you would normally spend
out-of-pocket on health care services.
You make an annual election
to a HCFSA. That election is taken from your salary in equal
allotments before any taxes are calculated. Since your taxable
income is reduced, you owe less tax. And, since the money
allotted to your HCFSA is taken before taxes, that money goes
much further. You have 20% – 40% more dollars to pay for
eligible health care expenses, depending upon your tax
situation and retirement plan. Your employing agency makes no
contribution to the program, but your agency will pay all
administrative fees associated with FSAFEDS on your behalf.
The maximum amount you can allot to a HCFSA is $5,000 (per
individual) for a Benefit Period and the minimum is $250.
The Federal workforce
includes a number of employees married to each other. If each
spouse/employee is eligible for FEHB coverage, both may enroll
for a HCFSA up to the maximum of $5,000 each ($10,000 total).
Both are covered under each other’s HCFSA. A HCFSA cannot be
used to pay for health insurance, life insurance, long term
care insurance or any other insurance premiums, or costs for
Temporary Continuation of Coverage (TCC).
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Can I submit health care
expenses that my family incurs for reimbursement from my HCFSA
account?
Yes. You may request
reimbursement for health care expenses incurred by you, your
spouse and/or any of your dependents that you can claim on
your tax return.
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I have self-only FEHB
coverage. Can I still submit expenses for other members of my
family?
Yes, as long as you are
able to claim them as a dependent on your Federal Tax return.
Your HCFSA dependent is different than your FEHB dependent.
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Is there a limit for a
HCFSA contribution?
The maximum annual
allotment for the FSAFEDS HCFSA is $5,000 per covered
employee, or $10,000 for a “Federal couple”, where both
spouses are covered under the FSAFEDS program. However there
is no household limit for a HCFSA, so you or your spouse may
enroll through FSAFEDS or another plan. Thus, the aggregate
HCFSA election for a couple may exceed the $5,000 FSAFEDS
maximum.
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Are expenses paid with
an HCFSA tax deductible?
If you use a HCFSA to pay
for eligible health care expenses, you cannot deduct those
same expenses on your federal income tax return. However, your
entire FSA allotment is pre-tax. If you itemize your medical
expenses on your tax return, you can only deduct the amount of
your total medical expenses that exceed 7.5% of your Adjusted
Gross Income (AGI). By contrast, when you use a HCFSA to pay
for medical and health care expenses, you receive a tax
deduction without having to meet the 7.5% AGI minimum. The
money you allot to an FSA is also exempt from FICA (Social
Security and Medicare) taxes, a deduction that is not
available on your federal income tax return. If your eligible
medical expenses exceed the 7.5% threshold by a significant
amount, you might want to consult with a tax professional to
determine which option is best for you.
If you are enrolled in the
Civil Service Retirement System (CSRS), your tax savings will
be decreased by 6.2%, since you do not contribute to Social
Security. Please refer to the FSAFEDS Calculator on the
FSAFEDS web site.
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Does a Health Care FSA
replace my insurance plan?
No! A Health Care FSA is
not insurance. It simply pays for your eligible out-of-pocket
health care expenses with pre-tax money. First, your claim is
generally submitted to your FEHB plan, FEDVIP plan or other insurance
carrier to consider your health care, dental, or vision
expenses. You can then submit the remaining out-of-pocket
eligible expenses, together with your plan's Explanation of
Benefits (EOB)or detailed statement from your provider, to FSAFEDS for reimbursement from your Health
Care FSA. Your co-payments would not require an Explanation of
Benefits but would require a detailed receipt(s). If you have
out-of-pocket expenses not covered by your health plan, or
that you do not wish to submit for reimbursement under your
FEHB, FEDVIP or any other health plan, you will need to submit a
detailed receipt.
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Can I deduct expenses
reimbursed by my Health Care FSA on my tax return as a medical
expense?
No, you cannot because
you have already received reimbursement with tax-free dollars
through your FSA.
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Why should I use an FSA
for health care expenses rather than deducting the expenses on
my income tax return?
Only medical expenses
that exceed 7.5% of your Adjusted Gross Income (AGI) can be
deducted on your Federal Income Tax form. However, FSAs are
tax-free from the first dollar. You do not have to meet the
7.5% AGI minimum before receiving the deduction. Further,
money set aside through an FSA is also exempt from FICA
(Social Security and Medicare) taxes. This exemption is not available on
your federal income tax return. However, you may wish to
consult with a tax professional to determine which option is
best for you.
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When is my HCFSA account
available to me, and how do I know how much is available?
Your HCFSA is activated once your employment is verified through your employing agency or its payroll office. You may
check your account balance by going to
My Account Summary.
Will the money I elect
for the Health Care FSA be paid directly to my provider?
No. Payment is made to
you via Electronic Funds Transfer (EFT).
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Can I elect to use
dollars in my HCFSA for premiums for other insurance policies
such as long-term care insurance, Temporary Continuation of Coverage (TCC), or group retiree
policies (from a previous employer)?
No. The Internal Revenue
Code (which governs how all flexible spending arrangements
operate) does not permit you to pay insurance premiums from
monies allotted to a HCFSA.
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Are there limitations
that apply to HCFSAs on an aggregate basis?
Unlike DCFSAs, there is
no maximum HCFSA allotment specified by law. While the maximum
permitted under FSAFEDS is $5,000 per covered employee, you or
your spouse may have another FSA available through another
employer plan or FSAFEDS. Thus, the aggregate HCFSA allotments
for a working couple may exceed the $5,000 FSAFEDS maximum per
individual employee.
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When is a health care
expense eligible?
A health care expense is
eligible for reimbursement when a covered service is rendered
during the Benefit Period in which you are enrolled, such as:
- a visit to a health care provider
or a provider comes to your home
- a prescription is filled by a
pharmacist (or the date of service indicated on your receipt if the fill date is not included)
- a piece of home medical equipment
is delivered to your home
- you pay for an eligible
over-the-counter product
Examples:
Sherry Cleaver had a
prescription filled for her son’s ear infection on March 13,
2008. She submitted her claim for reimbursement with a copy of
the prescription on March 20, 2008. Sherry incurred the
eligible expense when her child’s prescription was filled
before March 15 therefore, she will be reimbursed from her
2006 HCFSA because the expense was incurred during the grace
period.
However, Sherry also had a
prescription written for her on March 13, 2008 for asthma
medication, but did not bring it to the pharmacy until March
17, 2008. FSAFEDS will reimburse Sherry from her 2008 HCFSA
because the expense was incurred after the end of the grace
period.
Orthodontia expenses are
handled a little differently. Since there is often little
direct relationship between when a person visits the
orthodontist and when you pay for orthodontia, any orthodontia
expenses paid within a Benefit Period are reimbursable
regardless of the date of service. Please refer to the Orthodontia QRG for more
information.
Examples:
Laurie Healy’s son had
braces applied on April 1, 2008. Laurie entered into a payment
arrangement to pay the orthodontist’s total $3,000 cost in
monthly installments of $100, starting April 1, 2008. Her $100
per month payments would be reimbursable in the 2008 Benefit
Period.
Another exception is home
medical equipment (HME) that is rented rather than purchased.
If your FEHB plan or your provider decides that it is more
prudent to rent the equipment rather than purchase, you can
submit a claim each month for your out-of-pocket expense.
Example:
Tim Donovan has sleep
apnea. His physician writes an order for a Continuous Positive
Airway Pressure (CPAP) unit to see if that will improve his
sleep. The HME vendor delivers and installs the unit in Tim’s
home. The CPAP device is scheduled to be rented for six
months. The HME company submits a claim every month to Tim’s
FEHB plan. When Tim receives his Explanation Of Benefits, he
submits that along with a completed FSAFEDS claim form for
reimbursement.
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What expenses are
eligible for reimbursement?
Many of your typical
out-of-pocket health care expenses may be reimbursed by a
HCFSA. Some common reimbursable expenses not covered by most
FEHB or FEDVIP plans are listed below. All of these items meet IRS
criteria for a covered medical expense. For more complete
listings of eligible medical expenses, please refer to
Eligible Expenses Juke Box,
FSAFEDS OTC Quick Reference
Guide, and
IRS
Publication 502. You may also contact an FSAFEDS
Benefits Counselor at 1-877-FSAFEDS (372-3337), TTY line:
1-800-952-0450 Monday through Friday, from 9:00 a.m. until
9:00 p.m., Eastern Time.
- Chiropractic services
- Co-insurance, co-pay amounts and
deductibles
- Contact lenses and cleaning
solutions
- Dental care and procedures not covered under a FEDVIP plan
(including crowns, endodontic services, implants, oral
surgery, periodontal services and sealants)
- Eye surgery not covered under a FEDVIP plan(cataract, LASIK,
corneal rings, radial keratotomy, etc.)
- Eyeglasses not covered under a FEDVIP plan(including prescription
sunglasses and over-the-counter reading glasses)
- Hearing aids and batteries
- Infertility treatments
- Orthodontia not covered under a FEDVIP plan
- Over-the-counter medicines and
products (including antacids, allergy medicines, cold
medicines and pain relievers)
Note: Insurance
premiums, including health insurance, life insurance,
long-term care insurance and Temporary Continuation of
Coverage, are not eligible for reimbursement.
What expenses are
eligible for reimbursement only if medically necessary?
Some expenses are
eligible for reimbursement
only
when a doctor or other licensed health care practitioner
certifies that they are medically necessary. Your doctor’s
certification (
note or letter) must indicate
your specific medical disorder, the specific treatment needed,
how this treatment will alleviate your medical condition, and the length of treatment required.
Examples include:
- Air conditioners, central air,
heaters, and humidifiers installed in your home for allergy
relief
- Cosmetic surgery following an
accident, disease or other surgery
- Home Medical Equipment (e.g.,
reclining chairs, bed boards, special mattress)
- Hydrotherapy
- Massage therapy
- Water fluoridation units
- Weight loss program for treatment
of a specific disease (e.g., heart disease), not including cost of food
- Wigs for hair loss due to
chemotherapy or radiation treatment
FSAFEDS has a sample Letter of Medical Necessity (LMN)
that you and your health care provider can use. A personal
letter from your provider will also suffice as long as it
includes all the information necessary to determine medical
necessity. Please note,
if the treatment extends beyond the time period listed, you
need to submit a new certification/physician letter covering
the new time period.
If the letter or note does not contain all of the information listed below, your letter may be denied.
- Date
- Employee Name and SSN/UserID
- Patient Name
- Diagnosis (specific medical condition or disorder)
- CPT Code assigned to your diagnosis
- Specific treatment prescribed by the provider
- How the treatment will alleviate the condition
- Duration of the treatment
- Provider signature, license number, state and telephone number
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What expenses are NOT
eligible for reimbursement?
The following is a list
of common medical expenses not eligible for reimbursement. For
more complete listings of eligible medical expenses, please
refer to
Eligible Expenses Juke Box,
FSAFEDS OTC Quick Reference
Guide, and
IRS
Publication 502. You may also contact an FSAFEDS
Benefits Counselor at 1-877-FSAFEDS (372-3337), TTY:
1-800-952-0450, Monday through Friday, 9:00 A.M. until 9:00
P.M., Eastern Time.
- Insurance premiums, including those
for health insurance, dental and/or vision insurance, life insurance, long-term care
insurance, and Temporary Continuation of Coverage
- Cosmetic surgery or procedures
- Exercise and fitness programs for
general health, including health club membership dues*
- Expenses that have been reimbursed
elsewhere
- Expenses not incurred during your
period of coverage
- Fees paid to a health care provider
in advance of services being rendered (this includes health
maintenance fees but excludes braces. Go
here for further information on orthodontia.)
- Personal use items (items
ordinarily used for personal, living or family purposes such
as household disinfectants)
- Physician charges for services that
are not direct medical care, such as monthly fees for
guaranteed access and quicker appointments (so-called
“boutique practice fees”)
* Fees paid
for a fitness program may be an eligible expense if
prescribed by a physician and substantiated by his or her
statement or letter of medical necessity
that treatment is necessary to alleviate a medical
problem.
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What kind of
over-the-counter (OTC) medicines or products are eligible for
reimbursement through my HCFSA?
Under IRS guidance non-prescription antacids, allergy medicines, pain
relievers, cold medicines and other medicines or products
purchased to alleviate or treat the personal injuries or
sickness of you and/or your dependents are eligible items for
reimbursement through a HCFSA. Vitamins and other dietary
supplements that are merely beneficial to you and/or your
dependent remain ineligible for reimbursement. We have
developed an
OTC Quick Reference Guide to help
you know what kinds of expenses may be reimbursed. If you have
questions about the eligibility of a certain item(s), contact
an FSAFEDS Benefit Counselor at 1-877-FSAFEDS (372-3337), TTY:
1-800-952-0450, Monday through Friday, 9:00 A.M. until 9:00
P.M., Eastern Time. Keep in mind that when submitting a claim
for OTC medicines and products, a detailed receipt naming the
product will be required. If your receipt does not contain the
name of the product provided, you will need to submit copies of the
label or the front of the box/container for over-the-counter (OTC) products.
How does the IRS ruling
regarding over-the-counter (OTC) drugs impact my HCFSA?
If certain requirements
are met, your HCFSA can reimburse medicines and drugs that are
available without a prescription! (OTC medicines and drugs are
still not deductible for Federal Income Tax purposes.)
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What requirements must
be met for an OTC drug to be eligible for reimbursement
through my HCFSA?
- The item must be a medicine or drug
used “primarily for the treatment or alleviation of a
physical defect or illness” and would not be used but for a
particular medical condition.
- The item must not be used for
general health or cosmetic purposes.
- You, your spouse or dependent must
use the item.
- The expense must be for medical
care during the current Benefit Period.
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What OTC items are not
eligible for reimbursement?
OTC items are not eligible
for reimbursement if they are normally used for general health
or are used even when there is not a medical condition being
treated (ex. toothpaste, mouthwash, shampoo, lotion or moisturizer that also contains sunscreen) or are
cosmetic in nature (teeth whitening products, wrinkle
reducers).
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Some OTC drugs can be
used either for medical purposes or for general
health/cosmetic purposes. Are these dual-purpose items
reimbursable?
Any claim for a
dual-purpose item must be accompanied by additional supporting
documentation from a licensed medical practitioner. This
documentation must:
- Be on the licensed health care
practitioner’s letterhead, prescription form, or Letter of Medical Necessity
Form
- Be dated within the current Benefit
Period
- Include a diagnosis (that is, the
specific medical condition being treated)
- Indicate how the item being
purchased will directly impact this medical condition
- Include the licensed medical
practitioner’s signature
- If the treatment could be for
cosmetic purposes, specifically state that the treatment is
not cosmetic in nature
- Be included each time a claim is
submitted
FSAFEDS has published an OTC Quick Reference Guide that
describes the types of medications that are eligible and
ineligible for reimbursement. You can also contact an FSAFEDS
Benefits Counselor toll-free at 1-877-FSAFEDS (372-3337), TTY:
1-800-952-0450, Monday through Friday, 9:00 A.M. until 9:00
P.M. Eastern Time, if you have questions about the eligibility
of a certain item(s).
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Am I able to claim OTC
medications for income tax purposes if I choose not to
participate in the HCFSA?
No, the IRS has ruled
this benefit applies solely to flexible spending accounts. OTC items may not be deducted as a medical expense on your
federal income tax return.
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Can I purchase large
quantities of OTC drugs?
Reasonable quantities of
OTC drugs are reimbursable if purchased for either existing or
imminent medical conditions. If large quantities are necessary
for the treatment of an existing condition, a letter from a
medical practitioner (
refer to the dual-purpose question for
OTC drugs) must also indicate that the quantity being
purchased is necessary for the treatment of the diagnosed
medical condition.
Are prescription drugs
obtained from Canada or other countries outside the U.S.
eligible for reimbursement?
In most cases, no. The Food and Drug Administration (FDA)
has determined that the importation of prescription drugs from Canada
and other foreign countries is illegal. However, there is one exception.
If the FDA has approved the importation of prescription medicine into the U.S.
under the “Compassionate Use Act”, it
may be an eligible expense. You must
include the following information when submitting a claim for imported prescription
drugs that fall under the Compassionate Use Act:
- the date of purchase
- the cost of the prescription drug
- the name of the prescription drug
- If prescribed in the U.S.: the name and address of the prescribing physician
- If initially prescribed in a foreign country: the name of the country, name and address of
the prescribing physician and evidence that the drug is for the continuation of a treatment begun in that
foreign country.
- a copy of the FDA document that authorizes importation of the prescription drug
As a general rule, the FDA guidelines recommend that the purchase be no more than a 3 month supply.
The prescription drug must be legal for sale in the country of purchase and recommended for treatment
of a serious condition for which effective treatment may not be available in the United States.
For all other drugs purchased outside the U.S., the Internal Revenue Service (IRS) will not allow reimbursement
for these purchases from flexible spending accounts and FSAFEDS must abide by IRS guidelines.
How does reimbursement
for orthodontia work?
You incur the expense for
braces when you pay, so save your receipts. You’ll be able to
submit a claim for expenses you pay during the current Benefit
Period, even if the actual braces were put on before the
current Benefit Period. Initial payments for orthodontia
expenses can be reimbursed with a paid receipt. However, down
payments for orthodontia expenses cannot be reimbursed and you
cannot be reimbursed for any work completed prior to your
effective date in the plan. For more information on eligible
orthodontia expenses, view the
Orthodontia Quick Reference
Guide.
I know insurance
premiums aren’t qualified FSA expenses but what about
co-payments and deductibles under my health insurance?
Co-payments and
deductibles are eligible expenses. Be sure you save your
receipts!
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Can I be reimbursed
under my HCFSA for email or phone consultation with my
physician?
Yes, fees associated with
telephone or email consultation with your physician are
eligible for reimbursement under your HCFSA.
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Are health maintenance
fees for physician practices eligible for reimbursement from
my HCFSA?
No. Only expenses for
services actually provided/incurred are eligible for
reimbursement from your HCFSA.
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Top
High Deductible Health Plan
enrollees with a Health Savings Account cannot enroll in a
HCFSA, but they have the option of selecting the Limited
Expense Health Care Flexible Spending Account.
What is a Limited Expense Health Care
Flexible Spending Account?
A
Limited Expense Health Care Flexible Spending Account (LEX
HCFSA) is a flexible spending account option for employees enrolled in a Federal Employees Health Benefits (FEHB)
Program High Deductible Health Plan (HDHP) with a
Health Savings Account (HSA), or whose spouse is enrolled in a non-FEHB HDHP with an HSA. The LEX HCFSA is limited to
eligible dental and vision expenses only. Under IRS rules, you are not eligible to contribute to an HSA
and be enrolled in a FSAFEDS general purpose HCFSA at the same time. Go to www.opm.gov/hsa if you want to
learn more about HDHPs and HSAs.
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What kind of expenses does a LEX HCFSA
cover?
Expenses are limited to
dental and vision care services/products that meet the IRS
definition of medical care. Eligible expenses include your
out-of-pocket costs for such services/products as:
Dental Care:
- Cleanings
- Fillings
- Crowns
- Orthodontics
|
Vision Care:
- Contact lenses
- Eyeglasses
- Refractions
- Vision correction procedures
|
along with any eligible dental or vision over-the-counter expenses, such
as denture care products, contact lens cleaning and soaking
solutions, etc.
Your out-of-pocket costs for dental and vision care are the
only expenses eligible for reimbursement under the FSAFEDS LEX
HCFSA. Cosmetic services – whether dental or vision related -
are not eligible expenses. All of the other expenses normally
eligible under a “general” health care flexible spending
account are NOT eligible under a LEX HCFSA.
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How does a LEX HCFSA save me
money?
Using pre-tax dollars gives you
an immediate discount on your eligible out-of-pocket dental and vision care
expenses. By using a LEX HCFSA, you can preserve the funds in your Health Savings Account to
use/save for other purposes.
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Is there a limit on how much pre-tax salary I can set aside
in my LEX HCFSA for dental and vision care expenses?
You can set aside anywhere from a
minimum of $250 up to $5,000 per Benefit Period. As with the HCFSA, the maximum annual allotment for the FSAFEDS LEX HCFSA is $5,000 per covered employee, or $10,000 for a “Federal couple”, where both spouses are covered under the FSAFEDS Program. However there is no household limit for a LEX HCFSA, so you or your spouse may enroll through FSAFEDS or another plan. Thus, the aggregate LEX HCFSA election for a couple may exceed the $5,000 FSAFEDS maximum. REMEMBER: Under IRS rules, you are not eligible to contribute to an HSA and be enrolled in a FSAFEDS general purpose HCFSA at the same time. And, if your spouse is covered separately under a non-HSA plan, his/her expenses are not eligible under your LEX HCFSA and your expenses are not eligible under your spouse’s general purpose FSA.
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Are all my dependents covered under a LEX
HCFSA like they are under a general purpose health care
flexible spending account?
Yes, all your dependents that you claim
or are eligible to claim on your federal income tax return, or
with whom you jointly file your taxes are covered.
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When can I enroll in a LEX HCFSA?
You can enroll in a LEX HCFSA during
the Federal Benefits Open Season for the upcoming Benefit Period, which occurs mid-November through
mid-December each year. Go to www.FSAFEDS.com and click on
Enroll Now to enroll.
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How do I enroll in a LEX HCFSA?
You may enroll in a LEX HCFSA during the Federal Benefits Open Season for the upcoming Benefit Period
through their web site at www.FSAFEDS.com by clicking on
Enroll Now on the home page. If you have questions during the
enrollment process, contact an FSAFEDS Benefits Counselor, toll-free, at 1-877-FSAFEDS (372-3337), TTY: 1-800-952-0450, Monday through Friday,
9:00 A.M. until 9:00 P.M., Eastern Time.
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I was enrolled in a general purpose HCFSA for 2008 but will be changing to
a LEX HCFSA for 2009 because I am enrolling in a HDHP with an HSA. How will this affect
my account?
Your LEX HCFSA will be effective on 01/01/2009 if you
enroll during Open Season. If you change from a general purpose HCFSA to a LEX HCFSA for 2009, you will not be able
to fund your HSA until April 1, 2009. Since you cannot be enrolled in a general purpose HCFSA at the same time you are enrolled in an HSA, you cannot fund an HSA until the first day of the next month after the end of the grace period.
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When is my LEX HCFSA account available to
me, and how do I know how much is available?
Like other flexible spending accounts, a
LEX HCFSA is activated once your employment is verified through your employing agency or its payroll office. You may check your account
balance by going to My Account Summary.
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MY HSA fund covers dental and vision expenses, so why would I want an FSA
account too?
By establishing
a LEX HCFSA, you can save money on taxes by using FSA dollars
for dental and vision expenses while preserving your HSA funds for
other purposes, including simply saving those funds for the
future.
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What is a Dependent Care
Flexible Spending Account?
A Dependent Care Flexible
Spending Account (DCFSA) allows you to be reimbursed on a
pre-tax basis for child care or adult dependent care expenses
for qualified dependents that are necessary to allow you or
your spouse to work, look for work, or attend school
full-time. However, if you did not find a job and have no
earned income for the year, your dependent care costs are not
eligible (see the next FAQ for more information). Your DCFSA can be used to reimburse you with pre-tax dollars
if the expenses for dependents meet the IRS definition of
dependent for income tax purposes. An adult (e.g., parent,
grandparent, adult disabled child) may qualify as a dependent
if you are providing more than half of that person's
maintenance for the year.
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Do I, or my spouse if married, have to earn income during the year to use a Dependent Care FSA (DCFSA)?
A DCFSA allows you to be reimbursed on a pre-tax basis for childcare or adult dependent care expenses for qualified dependents that are necessary to allow you or your spouse to work, look for work, or attend school full-time. You (and your spouse if you are married) must have earned income during the year. Under Internal Revenue Code section 129 (see sections 129(a)(2)(A) and 129(b)(1)), the maximum amount that can be elected for a DCFSA is limited to the lesser of:
- $5,000 for single individuals or married couples filing joint returns;
- $2,500 for married couples filing separate returns,
- the employee's earned income (if less than $5,000/$2,500) or
- the spouse's earned income (if less than $5,000/$2,500).
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My spouse and I both elected a Dependent Care FSA and our combined election exceeds the maximum $5,000 household limit. Can my FSAFEDS account be adjusted or cancelled so we do not exceed the $5,000 maximum amount?
No. Your FSA elections are irrevocable unless you experience a
Qualifying Life Event (QLE). While you and your spouse will have your total household salary reduced by the amount of your combined elections, you will also probably receive that full amount in reimbursements.
When you prepare your Federal taxes during the next calendar year, you need to complete Form 2441 "Child and Dependent Care Expenses" (attached to Form 1040), and add the amount in excess of $5000 back into your income. However, if you have more than $5000 in dependent care expenses (effectively paid with after-tax dollars since you added it to your income), you may be able to use that additional amount to claim a dependent care tax credit on the Form 2441. Your excess contribution is not "lost" but can still be used to offset some dependent care expenses.
We encourage you to contact your tax advisor if you need further guidance.
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Who is a qualifying
dependent for a DCFSA?
A qualifying dependent
for the FSAFEDS DCFSA is your tax dependent:
- who is under age
13, or
- of any age
(including, but not limited to, your parents and
parents-in-laws), or your spouse who is mentally or
physically incapable of caring for himself or herself.
To claim dependent care
expenses, you must meet the following conditions:
- You must have incurred the expenses
in order for you and your spouse to work, look for work (as
long as you found a job and have earned income), attend
school full-time or your spouse was physically or mentally incapable of
self-care.
- The payments for care cannot be
paid to someone you can claim as your dependent on your
return or to your child who is under age 19. (However, payments can be made to a provider between ages 13-19 that you do not claim on your taxes as a dependent, or who does not live in your home.)
- Your filing status must be single,
qualifying widow(er) with a dependent child, married filing
jointly, or married filing separately.
- The care must have been provided
for one or more qualifying persons identified on the form
you use to claim the credit.
- You (and, if you're married, your
spouse) must maintain a home that you live in for more than
half of the year with your qualifying child or dependent.
Your child must have been
under age 13 when care was provided and you must be able to
claim the child as an exemption on your tax return. (For an
exception to this rule, see "Child of Divorced or Separated
Parents" in IRS
Publication 503, Child and Dependent Care Expenses.) A dependent of any age
(e.g., a parent) who is physically or mentally incapable of
self-care also qualifies if he or she can be claimed as an
exemption on your tax return (or could have been claimed,
except for the fact that he or she had $3,050 or more of gross
income).
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Is there a limit for a
DCFSA election?
By law, the maximum
amount you may allot for a DCFSA is $5,000 per household
($2,500 if married filing separately). You could exceed the
$5,000 limit if both you and your spouse work for employers
offering an FSA and the combined total of the allotments you
each elect for a DCFSA goes beyond the applicable limit of
$5,000. So, it is important that you plan carefully.
The IRS allows an income tax credit of
up to $6,000 of dependent care expenses if you have two or
more dependents (up to $3,000 for one dependent). The amount
of the credit is based on your adjusted gross income and
applies only to your Federal income taxes. So, while the maximum
allowed under a DCFSA is $5,000, you may be able to apply the
incremental difference between the DCFSA maximum and the Child
and Dependent Care Tax Credit depending on your tax situation.
For more information about this tax credit, please see IRS
Form 2441 and the accompanying instructions.
Are dependent care
expenses paid with a DCFSA tax deductible?
You are not permitted to
claim the same daycare expenses on both your Federal income taxes and DCFSA,
although in certain situations you may be able to take
advantage of both the DCFSA and the Child and Dependent Care
Tax Credit. If you have two or more qualifying individuals as
dependents, the IRS allows you to apply up to $6,000 of
dependent care expenses to your taxes. The maximum allowable
under a DCFSA is $5,000, so you may apply the $1,000
incremental difference between the DCFSA maximum and the Child
and Dependent Care Tax Credit if you have two or more
dependents and your expenses exceed $5,000. The chart below
helps to illustrate:
| MAXIMUM
ALLOWED DEDUCTION |
| |
DCFSA |
Federal Tax Credit |
| One Dependent |
$5,000 |
$3,000 |
| Two or More Dependents |
$5,000 |
$6,000
|
Note: For the Child and
Dependent Care Tax Credit, which is different than your DCFSA,
you may use up to $3,000 of the expenses paid in a year for
one qualifying individual, or $6,000 for two or more
qualifying individuals. These dollar limits must be reduced by
the amount of any dependent care benefits that you exclude
from your income.
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Which is better, a DCFSA
or the Dependent Care Tax Credit?
It depends on your
particular tax situation. You may apply up to $3,000 of
expenses paid in a year for one qualifying individual, or
$6,000 for two or more qualifying individuals to your taxes
through the Dependent Care Tax Credit. If you have two or more
dependents and your household adjusted gross income is less
than $43,000, you might find the Federal tax credit to be more
beneficial. However, if your household adjusted gross income
exceeds $43,000, it is likely the DCFSA will provide greater
tax savings. There is a
Dependent Care Tax Credit
Worksheet available online at
www.FSAFEDS.com that can help you
determine which option is best for you. If the Federal tax
credit is a better option, you will need to file
Form 2441 "Child and Dependent Care
Expenses" when you file your Federal Income Tax
return. The amount of your DCFSA election for the Benefit
Period will appear in box 10 on your W-2 form.
You may wish to consult a
tax professional if you are unsure which option is more
beneficial for your individual tax situation.
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What should I know about
a DCFSA versus Child Care Tax Credits?
Depending upon your
particular tax situation, it may be more advantageous to you
to use the tax credit rather than a DCFSA exclusively. The
amount of the DCFSA exclusion is limited to $5,000 per tax
year ($2,500 for married individuals filing separate returns).
If the applicable limitation is exceeded, the excess is
included in income and taxable. There is a
Dependent Care Tax Credit
Worksheet that can help you determine which option is
best for you.
The IRS allows an income
tax credit of up to $6,000 of dependent care expenses if you
have two or more dependents (up to $3,000 for one dependent).
The amount of the credit is based on your adjusted gross
income and applies only to your Federal taxes. So, while the
maximum allowed under a DCFSA is $5,000, you may be able to
apply the incremental difference between the DCFSA maximum and
the Child and Dependent Care Tax Credit depending on your tax
situation. For more information about this tax credit, please
see IRS Form 2441 and the accompanying instructions.
Please consult a tax
professional if you are unsure of which option is more
beneficial for your particular tax situation.
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What expenses are
eligible for reimbursement with a DCFSA?
You can use the DCFSA to
pay eligible expenses for care of your dependent children
under age 13, or for a person of any age whom you claim as a
dependent on your federal income tax return and who is
mentally or physically incapable of caring for himself or
herself.
Examples of eligible
services include:
- Placement fees for a dependent care
provider, such as an au pair
- Before and after-school care (other
than tuition expenses)
- Care of an incapacitated adult who
lives with you at least eight hours a day
- Childcare at a day camp, nursery
school, or by a private sitter
- Late pick-up fees
- Expenses for a housekeeper whose
duties include caring for an eligible dependent
- Summer or holiday day camps, including registration fees
- Activities in lieu of daycare when the fees associated with the activity are incidental to, or cannot be separated from, the cost of care (swimming lessons, arts and crafts, music lessons, etc.)
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What expenses are NOT
eligible for reimbursement by a DCFSA?
Examples of ineligible
DCFSA expenses include:
- Education or tuition fees
- Expenses for children age 13 and older
- Late payment fees
- Overnight camps
- Payment for services not yet
provided (*payment in advance)
- Field trips, clothing and food
- Transportation to and from the
dependent care provider
*Expenses can only be reimbursed after they have occurred.
When is my DCFSA account
available to me, and how do I know how much is available?
Like the health care
FSAs, a DCFSA is activated once your employment if verified with your employing agency or its payroll office.
However, unlike the health care accounts, the current balance in your DCFSA
account on the day your claim is processed is the maximum you
can be reimbursed at that time. If your bill for daycare
exceeds what you have in your account, FSAFEDS will process
your claim and reimburse you the amount in your account on the
day of processing. Any eligible claim amount that exceeds the
balance in your DCFSA at the time your claim is processed is
pended until your next allotment is received at FSAFEDS. As
soon as your next allotment is received, the remaining amount
will automatically be released to you, assuming your next
allotment of funds is sufficient to cover the balance of your
original claim amount.
Example:
Mysti Nelson’s bi-weekly
DCFSA allotment is $400 and she pays her daycare provider $500
every two weeks. At the time she submits her claim, Mysti has
$400 in her account. FSAFEDS will process the claim and
reimburse Mysti $400. When her next allotment is received,
FSAFEDS will release the additional $100 to Mysti, without her
having to complete an additional claim form.
IMPORTANT NOTE: Daycare
expenses cannot be reimbursed until services are actually
provided. In other words, pre-paid daycare expenses, or
expenses paid in advance, are not eligible for reimbursement
under a DCFSA until the services have been rendered. Refer to the Dependent Care Flexible Spending Account
section for more information.
You can update your EFT
information at any time by visiting www.FSAFEDS.com and logging in to
My Account Summary, or by
completing the EFT Form and faxing it to FSAFEDS
at 1-866-643-2245 (toll-free) or 1-502-267-2233.
If you are a new or newly
eligible employee enrolling outside of Open Season, you may still elect the
full amounts for both HCFSA and DCFSA. There is no proration.
Your allotment will be divided by the number of pay periods
remaining in the calendar year.
You may not transfer funds
from one account to the other (e.g. from your HCFSA to your
DCFSA or vice-versa) to cover unanticipated expenses, even if
you have a balance in one of the accounts. Spouses may not
transfer funds between each other’s accounts.
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Can I use a Dependent Care FSA to pay for
a babysitter in my home rather than using a daycare
center?
Yes. You can include
expenses paid to a babysitter if the services are necessary in
order for you and your spouse, if married, to work, look for
work*, or for your spouse to attend school full-time. However,
if you did not find a job and have no earned income for the
year, your dependent care costs are not eligible.
* For more information,
refer to Do I, or my spouse if married, have to
earn income during the year to use a Dependent Care FSA
(DCFSA)?
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I work at night and need an overnight babysitter. Is that an eligible child care expense?
Yes.
As long as the services are necessary in order for you or your spouse, if married
to work, look for work*, or for your spouse to attend school full-time they are eligible dependent care costs.
* For more information,
refer to Do I, or my spouse if married, have to
earn income during the year to use a Dependent Care FSA
(DCFSA)?
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My under-age-13 child goes to day camp
during the summer. Is that qualified child care?
Yes, if attendance at that camp allows
you and your spouse to work, look for work*, or for your
spouse to attend school full-time. However, if you did not
find a job and have no earned income for the year, your
dependent care costs are not eligible.
* For more information,
refer to Do I, or my spouse if married, have to
earn income during the year to use a Dependent Care FSA
(DCFSA)?
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My under-age-13 child goes to an
overnight camp during the summer. Is that qualified child
care?
No. Overnight camps or day camps that include an
overnight stay are not eligible for reimbursement. The IRS Publication 503
does not recognize this as a work-related expense.
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My under-age-13 child goes to private
school. Are tuition payments qualified child care?
No. School tuition is not child care. But
before/after school care is a qualified expense. Your provider
may be required to itemize the costs between tuition and
before/after school care.
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I pay my daycare center the same amount
every single week. Do I have to submit a claim every week or
can I set it up to automatically receive reimbursement?
You must submit a claim every time
you wish to request reimbursement of an expense. There is no
automated process. Many individuals file claims monthly to
eliminate weekly claim submission. However, it truly depends
on your specific needs and whether you can wait until the end
of the month for reimbursement or if you need to receive funds
weekly. Regardless of the amount on your claim you will only
be reimbursed up to the amount in your account at that
time.
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My child turns 13 in the middle of a
week. Can I submit a bill for the whole week’s child
care?
No. You can only submit a bill
for the portion of the week during which your child was under
age 13.
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I am thinking of having an au pair take
care of my child. There is a $2,500 up-front fee and I will be
paying $150 a week to the au pair. What, if any, of this
qualifies as an eligible expense?
The up-front fee qualifies as an eligible child
care expense if it is an expense you must pay in order to
obtain care. However, you must only apply the expense
proportionately over the duration of the agreement to employ
the au pair. For example, for an annual agreement with an au
pair who is paid weekly, 1/52nd of the placement fee would be
reimbursable each week. The fee of $150 per week as well as
other work related expenses may qualify as a child and
dependent care expense, depending on your tax situation.
Please refer to Publication 503, Child and
Dependent Care Expenses for more information.
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What information do I need from a
dependent care provider?
Eligible childcare providers must provide
you with their SSN or TIN. The caregiver must declare your
payment as taxable income. If it is a childcare center
providing care for more than six non-resident children, the
provider must comply with state and local regulations.
If your provider does not
have a SSN or TIN, you must submit a letter indicating that
you have attempted to obtain a SSN or TIN from the provider
and were unable to do so, as the provider does not have one or
will not provide it to you.
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Do I need a claim form
and where do I find it?
Yes. Unless you are
participating in paperless reimbursement (for HCFSA only), FSAFEDS requires
that you complete and submit a claim form to FSAFEDS for
processing. Click on the link to download a
Health Care Claim Form or a
Dependent Care Claim Form.
How long will it take to
receive reimbursement?
In almost all instances,
if you fax your claim to FSAFEDS it should take no longer than
5 to 7 business days from the time you submit your claim until
you receive your funds by direct deposit through Electronic
Funds Transfer (EFT). Please check with your individual
banking institution if you have questions regarding EFT
deposits.
You will be reimbursed for eligible health care expenses after you have incurred the expense and FSAFEDS processes your claim - as long as your employment has been confirmed
with your employing agency or its payroll office. However, dependent care
expenses will only be paid up to the amount in your account at
the time the claim is processed. If a dependent care claim
cannot be paid in full, as soon as your next allotment is
received, the balance will be issued to you up to the amount
then in your account. Depending on your allotments and your
dependent care expenses, it may take several pay periods
before a DCFSA claim can be paid in full. Please note, reimbursements are based
on the date that the service was provided and not when you actually paid for the service.
If you participate in paperless
reimbursement, your FEHB plan or Vision Service Plan (VSP) automatically forwards your
claims to FSAFEDS weekly (daily if with Blue Cross Blue
Shield or Mail Handlers). It may take up to 10 to 12 business days
from the time your FEHB plan submits your claim until your funds
are deposited into your account via EFT. The payment
schedule for retail and mail-order pharmacy vendors is
generally longer than what you may experience for medical,
dental and vision claims. The longer payment schedule means your pharmacy
claims will most likely take even longer to be reimbursed by
FSAFEDS.
How do I submit a claim
for reimbursement?
There are three ways to
submit your claim:
Fax:
For faster reimbursement and
notification of claims receipt, fax your claim to the FSAFEDS
24-Hour Fax line at 1-866-643-2245 (toll-free) or
1-502-267-2233.
Mail:
FSAFEDS Program
PO Box 36880
Louisville, KY 40232
Overnight Mail:
SHPS
Attn:
FSAFEDS Program
11405 Bluegrass
Parkway
Louisville, KY 40299
Toll-free Number:
1-877-FSAFEDS (372-3337)
TTY Line: 1-800-952-0450
Claims Confirmation:
When you fax your Health Care, Limited
Expense Health Care or Dependent Care FSA claim to FSAFEDS,
you can receive confirmation by email that your claim has been
received. To take advantage of this free, convenient service,
include your email address during the enrollment process when
prompted and/or include your email address on the claim form
when submitting your information for reimbursement.
If your claim is received prior to
4:00 P.M. Eastern Time on any given business day, you will
receive your confirmation email on the same day we receive
your claim. If FSAFEDS receives your claim after 4:00 P.M.
Eastern Time, your confirmation email will be sent on the
following business day.
Regardless of whether you have
submitted claims, you will receive information by October 31
of each Benefit Period and again later in the Benefit Period
notifying you of how much remains in your FSAFEDS account(s),
as well as summarizing your claims processed to date. If you still have
a balance in your account in March, we will send you another
statement reminding you that you have until April 30 to submit
your claims for the Benefit Period.
Denial of Claims
If you submit a claim that is
partially or fully denied, the FSAFEDS reimbursement statement
will provide detailed information on why the claim was denied.
The statement will include:
- A specific denial code supported
with reason(s) for the denial
- A description of additional
material or information you can provide to allow the claim
to be reconsidered for reimbursement
I faxed separate claim
forms within a few days of each other for recent expenses I
incurred. Will my reimbursements be combined or deposited
separately?
If you fax multiple claim
forms within a few days of each other, there is a chance they
will be processed on the same day. This means your total
reimbursement amount may be combined and appear as one
deposit. Let's look at an example:
Jane submits two separate claims. On
Saturday, she faxes a health care claim for $50 and on Monday
she faxes a dependent care claim for $100. FSAFEDS processes
both claims on the following Friday. When we release Jane's
reimbursement, a total deposit of $150 from FSAFEDS will
appear in her account.
How do I get reimbursed
for my HCFSA or LEX HCFSA claims?
You must file a claim
form with FSAFEDS to be reimbursed for an eligible expense.
The
Health Care claim form is available on the
FSAFEDS web site at
www.FSAFEDS.com.
With your completed claim form, you
must submit one of the two items below to document your claim:
- Explanation
of Benefits Statement (EOB) – This is the statement that
you typically receive each time that you, or a health care
provider, submit a claim for payment to your health, dental,
or vision care plan. The EOB shows the expenses paid by the
plan and the amount you must pay. For expenses that are
partially covered by your health care plan, your spouse’s,
or other dependent’s, you must attach the EOB.
- Acceptable
Evidence – For expenses that are not covered at all by
your, your spouse’s or other dependent’s health care plans,
or that you elect not to submit to your FEHB plan or any
other insurance you may have, you must sign the claim form
verifying that the expense is not covered and/or has not
been reimbursed by FEHB, FEDVIP or any other insurance. Claims will
not be processed without acceptable evidence of your
expenses. A cancelled check alone is not acceptable
evidence. Acceptable evidence includes detailed receipts,
which contain the following information:
- Type of service or name of
product purchased
- Date expense was incurred
- Your name or your dependent’s
name for whom the service/product was provided, except for
over-the-counter medications
- Person or organization providing
the service/product
- Amount of the expense
If your receipt does not clearly show
the name of the product, you will need to submit copies of the
front of the box/container for over-the-counter (OTC) products to your
claim form.
It should take no longer than 5 to 7
business days from the time FSAFEDS receives your claim until
the funds reach your bank via Electronic Funds Transfer (EFT).
You can update your EFT information at any time at www.FSAFEDS.com through My Account Summary .
How do I get reimbursed
for my DCFSA claims?
You must file a claim
form with FSAFEDS to be reimbursed for an eligible dependent
care expense. The
Dependent Care claim form is available on the
FSAFEDS web site at
www.FSAFEDS.com.
- For eligible Dependent (Day) Care
expenses, attach a copy of the itemized bill or signed receipt, or
have the provider sign the Affidavit section of the claim form.
- Requests will not be processed without the
Tax ID Number or Social Security Number for all providers. If your provider does not have a SSN or TIN, you must
submit a letter indicating that you have attempted to obtain a SSN or TIN from the provider and were unable to do so,
as the provider does not have one or will not provide it to you.
You must submit a claim each time you
request reimbursement for dependent care expenses, even if you
regularly pay your dependent care provider the same amount each
week. You will be reimbursed up to the current amount in your
DCFSA at the time your claim is processed.
IMPORTANT NOTE: Payment
in advance of a deposit to hold a spot for placement in a program, such as day camp or after-school care,
is a reimbursable expense under a DCFSA. However, payment
up-front for future services is not eligible for claim
reimbursement until the actual service is rendered.
Examples:
Sherry Cleaver pays a $100 deposit fee
in May for summer day camp for her two sons. Sherry can file
an expense for $100 in May even though the actual service will
not be rendered until July.Allison Francini enrolls her three
sons in a two-week summer camp in February. The camp will run
in July. The camp, which is extremely popular, insists that
payment be made in full at the time of registration. Since
Allison has paid in advance for services, she cannot file for
reimbursement until after some or all of the camp has taken
place. She can either submit a claim after each week or wait
and submit the full amount after the camp has taken place.
When you submit a claim, attach a copy
of the bill or signed receipt to the claim form, or have your
provider sign the Affidavit section on the
claim form. All claims must include a TIN or SSN for all
providers. If you fail to supply the appropriate
documentation, your reimbursement will be delayed or may be
denied. Be sure to keep a copy of the bill or signed receipt
for your records.
If you terminate employment for any
reason mid-year and you still have a balance in your DCFSA,
you may continue to submit claims for reimbursement for
eligible expenses you incur after your termination date but
before the end of the Benefit Period, up to the amount of your
balance.
I’ve been reimbursed for
more than what I’ve contributed. Why?
With a HCFSA and a LEX
HCFSA, you have access to the full amount of your annual
allotment to your FSA, even before the entire annual allotment
has been deducted from your paycheck. Once your employment is verified, you can use your full HCFSA or LEX HCFSA to pay for
eligible health care expenses from the very first day your
account became effective.
Examples:
Wendy Schumann elected $3,000 for her
HCFSA for the Benefit Period. On January 15, Wendy’s husband
incurred $2,000 in dental expenses. Although Wendy has not yet
contributed $2,000 into her health care account (as of January
15), she can still receive a reimbursement for $2,000.
Heidi Meuchner enrolled in a HCFSA as a new participant and
elected $1,000 for the Benefit Period. On New Year’s Day,
Heidi slipped on the ice and fell. She later went to the
emergency room where an x-ray revealed a broken wrist, which
was set. Heidi’s emergency room expenses are eligible for
reimbursement under her HCFSA. Since it’s so early in the
Benefit Period, Heidi has not had a single allotment taken
from her paycheck. She can submit her expenses, but her
reimbursement may be held until her employment is verified, since that is when her election is activated for
the Benefit Period.
What documentation do I
need to submit for reimbursement of eligible OTC drugs?
Along with your completed
and signed claim form, you need to submit an itemized receipt
from the provider indicating the following:
- name of the provider or name of
retailer where items were purchased
- date of the purchase
- documented description of the item being
purchased (a handwritten description is not acceptable)
- your out-of-pocket cost for the
service
If your receipts do not have this
information pre-printed, you will need to submit the product
label, along with the receipt with the price. Your signature
on the claim form certifies that you, your spouse, or your
dependent will use the item purchased.
Can I submit claims
during the Benefit Period for expenses that I incurred prior
to my effective date?
No. You submit claims for
expenses you incur on or after the first day of the Benefit
Period during which you’re enrolled.
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How long after the end
of the Benefit Period do I have to submit my receipts?
You have until April 30 to submit claims for expenses incurred during the previous Benefit Period. Your
claim must either be postmarked or faxed by April 30. Be sure to
keep a copy of your fax confirmation for your records. If a claim is denied
for additional documentation, you have 30 days from the date of the denial to
resubmit your claim with the appropriate documentation, even if that is after April 30.
Your resubmitted claim must contain the exact same expenses that you submitted on the original
claim. You cannot substitute or add new expenses to the resubmitted claim. You will
forfeit the funds if you do not resubmit the claim with the appropriate documentation within those 30 days.
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Is there a minimum
reimbursement amount that I may claim?
Yes. FSAFEDS has a
minimum reimbursement amount of $25.00. If your claim does
not total $25.00, it will be processed and you will receive a
reimbursement statement, but your payment will be pended until
you submit another claim and reach the $25.00 aggregate
amount, or until the end of the quarter, whichever comes
first.
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Can I be
reimbursed for a claim that is more than the current amount in
my FSA account?
The answer depends on the
type of FSA you have:
- For the Health Care and Limited
Expense Health Care FSA, you can be reimbursed for
claims that are more than the current amount in your account, as
long as the total is not more than the amount of your annual
election.
- For the Dependent Care FSA, you can
only be reimbursed up to the amount in your
account at the time your claim is processed.
Can I be reimbursed for
dependent daycare expenses as soon as I have paid for them?
Eligible Dependent Care
expenses are reimbursable when they are incurred, not when
they are paid. Expenses are considered as incurred when you
are provided with the service, not when you are billed or pay
for the service.
Example:
On March 1 you pay for the
entire month’s dependent daycare expenses. You can be
reimbursed once the services have been provided, not on March
1 when you paid for it. You can submit claims after each week,
every two weeks, or wait until the end of the month.
Can I submit claims for
dependent care expenses that exceed the current amount in the
account?
Yes, but unlike HCFSAs,
you cannot be reimbursed for a DCFSA claim for an amount that
is more than what you have contributed to the account at the
date of the claim submission. For example, if you contribute
$500 monthly you will only be able to get reimbursed $500
per month.
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Must I have the full
allotted amount in my HCFSA and LEX HCFSA accounts before I
can submit claims for expenses/services incurred?
No. Unlike DCFSA’s you
will be fully reimbursed for eligible claims incurred prior to
the end of the Benefit Period not to exceed the annual amount
you elected. This is true regardless of how much you have
contributed to the account, as long as you are an active
participant in the program.
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Must I have the full
allotted amount in my DCFSA account before I can submit claims
for expenses incurred?
No, but unlike the HCFSA
and LEX HCFSA, your DCFSA reimbursement is always the lesser
of:
- the amount that you request for
reimbursement
- the amount in your account at the
time your claim is processed
If you file a claim that exceeds the
amount, FSAFEDS will reimburse you up to the amount in your
account at the date of submission, and pend the balance until
you make another allotment into your DCFSA.
Do I need to submit all my claims before the end of the year?
No. You have until April 30 following the end of the Benefit Period to submit health care and dependent care
claims. All eligible expenses must be incurred by March 15 of
the following year regardless of when they were paid for. For
example, if you visit the dentist on February 28 but do not
pay until March 18, the eligible expenses for this visit are
reimbursable. An exception to the general rule is made for
expenses for services that are sometimes pre-paid, such as
initial payments for orthodontia expenses.
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How should I submit my gym membership claims if I pay for the full amount upfront?
For a gym membership to even be considered for reimbursement, you must first have an approved
Letter of Medical Necessity (LMN) on file for a medical condition that requires exercise at a gym. If the LMN is
approved, you have two options for submitting these types of claims. Please note that the IRS regulations stipulate
that we cannot reimburse expenses that will be incurred in the future, even if the provider requires payment in
advance for the entire period. This includes expenses such as gym memberships:
Here are your options:
- Submit expenses for a full month after that month has ended.Let’s say you are billed monthly for gym
membership, and paid for January 1 – January 31. On February 1, you would submit a claim form for January only,
and include the receipt for January’s membership that details the dates of service, provider name and cost.
- Submit the expense for a specific time period.Let's say you were asked to pay a fee upfront for a
specified time period. For instance, in April you were asked to pay a $270 fee to cover gym membership for April
through December. On May 1, you could submit a claim for $270 but we would pay a pro-rated amount of $30
($270 divided by 9 months). On June 1, you could submit another claim and we would pay another $30.
You could submit a claim each month thereafter with the appropriate documentation until you were reimbursed
for the entire expense.
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What is paperless
reimbursement?
FSAFEDS offers
paperless reimbursement for your HCFSA through a
number of FEHB and FEDVIP plans. This means that when you or your provider file claims
with your FEHB or FEDVIP plan, FSAFEDS will automatically reimburse your
eligible out-of-pocket expenses based on the claim information
it receives from your plan. There is little or no paperwork involved, and in many cases you will receive your reimbursement before your bill is due.
If you are
not the FEHB contract holder, you must provide information
about the contract holder, including his or her Social
Security Number. You must be the FEDVIP contract holder (the person who pays the premium) to participate in PR for dental and/or vision.
You can enroll in paperless reimbursement at any
time outside of Open Season by visiting www.FSAFEDS.com and logging into
your account through My Account Summary and selecting Paperless Reimbursement form the left-hand menu.
Paperless reimbursement does not
change your relationship or obligations to your health care
provider, speed up the time it takes your provider to submit a
claim to your FEHB and/or FEDVIP plan, or the time it takes for your plan to
process your claim. You are expected to make payment for your
out-of-pocket expenses as requested by your provider. Payment
will be made directly from your FSAFEDS account to you via
EFT.
Important Note: For
married Federal employees where both spouses are enrolled in
FSAFEDS but are covered under one FEHB self and family
enrollment, all claims will be paid via paperless
reimbursement (PR) from the FEHB contract holder’s (the person who pays the premium)FSA account.
Once the contract holder’s balance has been exhausted, all
claims need to be submitted manually against the other
spouse’s FSA account. For married Federal employees with two
self-only enrollments, claims will be applied against the
respective contract holder’s account only. If this processing
and order of precedence does not meet your needs, please do not elect PR. If your spouse has secondary insurance, you probably should not enroll in PR.
Which FEHB and FEDVIP plans
participate in paperless reimbursement?
Currently there are several
participating plans: Aetna, APWU Health Plan, Association Benefit Plan, Blue Cross
/Blue Shield Service Benefit Plan (BCBS), Foreign Service Benefit Plan, Government Employees
Hospital Association (GEHA), Humana, Mail Handlers,
M.D. IPA, National Association of Letter Carriers
(NALC), Preferred Care, Special Agents Mutual Benefit
Association (SAMBA), United Health Care; as well as, Aetna Dental, GEHA Dental and Vision Service Plan (FEDVIP). FSAFEDS continues to work with other FEHB and FEDVIP
plans to implement this convenient feature.
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How do I sign up for
paperless reimbursement?
You will be prompted to
sign up when you enroll. Once you’ve enrolled in
FSAFEDS, you can sign up or cancel your participation in
paperless reimbursement at any time outside of Open Season by
logging into
My Account Summary and selecting Paperless Reimbursement from the left-hand menu. If you enroll at any time during the Benefit Period after Open Season,
your enrollment in paperless reimbursement is effective the next day. You will need to manually submit claims for any services provided for you or your family members covered
under your FEHB plan and/or FEDVIP plan that are processed prior to your PR enrollment.
Paperless reimbursement is not
available if you are enrolled in a LEX HCFSA.
How does paperless
reimbursement work?
Once your FEHB and/or FEDVIP plan
processes your claims (medical, certain dental, vision and/or
prescription claims), it will forward your out-of-pocket
expense(s) electronically to FSAFEDS for automatic
reimbursement to your Health Care Flexible Spending Account
(HCFSA). By automatically forwarding these claims, you do not
need to manually prepare and submit your claims with
out-of-pocket costs from your plan to FSAFEDS.
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Do I have to do
anything?
No action is required to
file your FSAFEDS claim. Once your claim has been processed by
your FEHB plan and/or FEDVIP plan, the claim will automatically forward to the
FSAFEDS program. Note, however, that you must still file
claims that are not forwarded to us by your plan. For additional information, see the
Paperless Reimbursement Quick Reference Guides.
Does paperless
reimbursement speed up the FEHB or FEDVIP claims-paying process?
No, it does not. The
timeline for your FEHB and/or FEDVIP plan to process your claim has not
changed. Once your claim has been processed it will
automatically be submitted to your FSAFEDS account. Your FEHB
plan forwards your retail and mail-order pharmacy claims to
FSAFEDS for processing from your Health Care Flexible Spending
Account. The payment schedule for both the retail and
mail-order pharmacy vendors is generally longer than what you
may experience for your medical, dental and vision claims. This longer
payment schedule means that your pharmacy claims will likely take longer to be reimbursed by FSAFEDS under paperless
reimbursement.
For most medical, dental and vision expenses,
it will take FSAFEDS 10-12 business days to process your claim
from the date the expense was processed by your FEHB or FEDVIP plan. Retail and mail-order
pharmacy claims may take up to 4-5 weeks to process, from the
date the expense was incurred.
Do I still pay my
co-pays, deductibles, and other out-of-pocket expenses?
Yes. Paperless
reimbursement does not change in any way your relationship and
obligations to your health care providers. You are expected to
make payment for your out-of-pocket expenses when requested by
your provider. Under paperless reimbursement, FSAFEDS will
reimburse you – not your provider. While in many cases you may
be reimbursed before you receive a bill from your provider,
you may not use paperless reimbursement as a reason for
withholding a provider payment when you don’t.
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How often does FSAFEDS
receive the file of processed claims from my FEHB plan?
FSAFEDS receives a file
weekly for claims processed the prior week from each
participant plan with the exception of Blue Cross/Blue Shield
which send daily files.
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Are my retail and/or
mail-order pharmacy claims covered under paperless
reimbursement?
That depends on your plan.
| Plan Name |
Services/Claims Covered
|
Services/Claims
NOT Automatically Forwarded
|
| Aetna
|
Medical, Dental, Pharmacy, Vision |
|
| APWU
|
Medical, Dental, Pharmacy |
Vision |
| Association Benefit Plan
|
Medical, Dental, Pharmacy |
Vision |
| Blue Cross/Blue Shield
|
Medical, Dental, Pharmacy |
Denied Pharmacy, Routine Vision |
| Foreign Service Benefit Plan
|
Medical, Dental, Pharmacy |
Vision |
| GEHA |
Medical, Dental, Pharmacy |
Denied Pharmacy, Vision |
| Humana |
Medical, Pharmacy, Vision |
Dental |
| M.D. IPA |
Medical, Pharmacy, Dental, Vision |
Primary Care Physician, Lab, Radiology |
| NALC HBP |
Medical, Pharmacy |
Dental, Mental Health Services, Vision |
| Preferred Care |
Medical, Pharmacy, Vision |
Dental |
| SAMBA |
Medical, Dental, Pharmacy, Vision |
Denied Pharmacy |
| United Health Care |
Medical, Pharmacy, Dental, Vision |
|
| Aetna Dental (FEDVIP) |
Dental |
|
| GEHA Dental (FEDVIP) |
Dental |
|
| VSP (FEDVIP) |
Vision |
|
What if my FEHB or FEDVIP plan
does not participate?
You may contact your plan
and ask them to consider participating. You can also send us
an email at
FSAFEDS@shps.com, telling us the
name of your plan. We will contact your plan to encourage them
to consider participating in the program.
Can I enroll now for
paperless reimbursement?
Yes, you may enroll – or
disenroll – at any time. Simply go to
www.FSAFEDS.com, click on
My Account Summary and select
Paperless Reimbursement in the left-hand menu.
If I’m enrolled in one
of the plans that participate in Paperless Reimbursement,
am I automatically enrolled in PR?
No. You must make a
positive election each year to participate.
If your plan participates, and you want to enroll, click
on the
My Account Summary section at
www.FSAFEDS.com and select Paperless Reimbursement from the left-hand menu.
How will my FEHB or FEDVIP plan
know that my dependents are covered under my health insurance?
You provide your plan with this information when you enroll, or when there has
been a change in your enrollment.
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How does my FEHB and/or FEDVIP plan
know to submit claims for my dependent to my FSA?
Your plan submits
all claims - for all family members covered under your plan - to FSAFEDS via the contract holder’s SSN. If you are
not the FEHB contract holder, you will need to provide that
information during enrollment. You must be the FEDVIP contract holder for Aetna Dental, GEHA Dental or Vision Service Plan (VSP) in order to participate in PR.
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What if I submit a claim
directly to FSAFEDS?
We strongly encourage you
not to manually submit the same expenses – after all, you signed up for
paperless reimbursement so you wouldn’t have to fill out claim
forms and submit receipts! However, if you do submit a claim
that is automatically rolled over from your FEHB or FEDVIP plan, the
claim would be denied as a duplicate.
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Will my plan submit
expenses for over-the-counter medicines or products via
paperless reimbursement?
No. Since
non-prescription drugs are not eligible expenses under FEHB
coverage, your plan will not process these claims, and there
will be no EOB (Explanation of Benefits) information to send
to FSAFEDS.
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Who do I contact if I
have questions concerning paperless reimbursement or what's
allowed under my HCFSA?
You can download a
Paperless Reimbursement Quick Reference
Guide, or contact an FSAFEDS Benefits Counselor,
toll-free number at 1-877-FSAFEDS (372-3337), TTY:
1-800-952-0450, Monday through Friday, 9:00 A.M. to 9:00 P.M.
Eastern Time.
What is the FSAFEDS Grace Period?
The grace period is an
additional 2 ½ months (January 1 through March 15) during which you can incur eligible expenses
that can be reimbursed from your prior year balance. The grace period helps accountholders avoid forfeiting any of
the funds they deposited in FSA accounts. It does not mean you can have
prior year expenses paid from the current year.
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How will eligible grace period expenses be reimbursed?
First, you must have a remaining balance as of December 31. If you
do not have a balance, the grace period will have no affect on your account.
Let's say you do have a balance as of December 31
and you incur eligible expenses during the grace period (January 1 thru March 15).
You will submit those expenses in the same manner as you normally would by using the
FSAFEDS Health Care claim form or FSAFEDS Dependent Care claim form. You will identify on the form
from which plan year you want each expenses paid. If you do not indicate a plan year,
we will default to the current year.
Following the deadline for filing claims against your prior
year accounts (April 30), any grace period expenses that were paid from your current
year balance will be reconciled against your prior year up to the available balance.
This reconciliation (you may also hear it referred to as a "true-up") will occur
automatically around June 15 or can occur earlier, at your request.
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Do I have to have a 2009 account to take
advantage of the grace period?
No. Since the grace period is a part of the 2008 Benefit Period, you do not need to
have a 2009 account to take advantage. You must be employed by an agency that participates in FSAFEDS and actively making allotments from your pay through December 31 in order to participate in the grace period.
If you separate or retire from the government
after December 31, you will still be eligible for the grace period after you
leave.
I enrolled in a general purpose HCFSA in 2008 but will enroll in an HSA in 2009.
I know that means I can only enroll in the LEX HCFSA, but how does that work
with the grace period?
Your grace period claims (those incurred between January 1 and March 15) can include
expenses eligible under a general purpose HCFSA but those claims have to be paid from your 2008 account.
General purpose HCFSA eligible expenses (that are not dental or vision related) cannot be paid from your 2009 LEX HCFSA.
So, on the claim form be sure you indicate "2008" for general purpose HCFSA eligible expenses. If you erroneously select "2009", we will
process it from 2008 and advise you of this change on your reimbursement statement.
In addition, if you had a general purpose HCFSA in 2008 and you switch to an
HDHP with an HSA for 2009,
your HSA funding will be postponed until April 1.
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Should I request the reconciliation
earlier or should I wait for this to happen automatically
in mid-June?
In most cases, you will want to request a
reconciliation to have your grace period expenses applied
against your prior year balance as soon as your grace period
expenses have reached an amount equal to (or greater than)
your prior year account balance. The exception is when you
have eligible expenses from the prior year account that you
haven’t yet filed and received reimbursement.
Once you have exhausted
your prior year account, it is no longer available for
processing expenses. So if you exhaust your prior year account
with grace period expenses, and you then realize that you had
un-reimbursed prior year expenses, you will not be reimbursed for those expenses
and will have spent current year funds needlessly. You will need to plan wisely in this case.
How do I request my grace period expenses
to be reconciled against my prior year account balance?
You may request a
reconciliation (“true-up”) by contacting an FSAFEDS Benefits
Counselor at 1-877-372-3337 TTY: 1-800-952-0450, Monday
through Friday, 9:00 A.M. until 9:00 P.M., Eastern Time, or
via email at FSAFEDS@shps.com. We will
reconcile your account on the last Friday of the month that
you request reconciliation.
Do I need to request a true-up once my prior year balance is
exhausted or will it occur automatically?
Once your prior year balance is exhausted, your account
will automatically be included in the monthly true-up that will occur on
the last Friday of each month through April. A final true-up will occur mid-June.
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What if I don’t ask for
reconciliation? Will you do one anyway?
Yes. A final reconciliation automatically
occurs for all participants, whether requested or not,
mid-June for the prior year
Benefit Period.
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Is there any difference between having grace period expenses
paid from the current year versus the previous year?
Yes.
While the final outcome remains the same, how it affects your account is different.
Let's say you have a $250 balance in your 2008 account, going into 2009. You also
elect to contribute $1,000 to your 2009 account. You incur $250 in eligible grace
period claims (incurred between January 1 and March 15). That $250 could be paid from either your 2008 account or your 2009 account, because they were incurred during 2009.
Example 1 –
Paid Out of 2008 Account First
Let’s assume you chose to be reimbursed for the $250
grace period claims out of your 2008 account. That would
bring your 2008 account balance to zero. Sounds good, right?
But now let’s take it a step further. In April 2009, you discover
$250 worth of prescription expenses that you incurred in
November 2008. You have until April 30, 2009 to submit previous year
expenses so you submit them to FSAFEDS for reimbursement. We
would have no choice but to deny these claims because your
2008 account balance is zero (remember, you zeroed it out with
grace period claims). We cannot pay
claims incurred during 2008 from your 2009 account.
Example 2 –
Paid Out of 2009 Account First
Now, let’s look at the same situation
but we'll assume you chose to be paid from your 2009 account. As with the
example above, let’s assume your 2008 remaining balance is
$250 and your new 2008 election is $1,000. But this time, the
$250 worth of grace period claims will be paid out of your
2009 account, bringing your 2009 balance to $750. Remember
those November 2008 prescription expenses you found in April
and submitted? In this scenario, you submit those claims before April 30 and
instead of receiving a denial, you receive reimbursement
because your 2008 account balance still exists.
| Here’s an
illustration of these two examples. |
Example 1: Pay from 2008 first
|
Benefit Period |
| 2008 |
2009 |
| Balance/Election |
$250.00 |
$1,000.00
|
| Grace
Period Claims Total |
($250.00)
|
$0.00
|
| Account
Balance |
$0.00 |
$1,000.00
|
| April 2009,
submit $250 from November 2008 |
Deny Claim
|
$0.00
|
| Account
Balance |
$0.00 |
$1,000.00
| |
Example 2: Pay from 2009 first
|
Benefit Period |
| 2008 |
2009 |
| Balance/Election |
$250.00 |
$1,000.00
|
| Grace
Period Claims Total |
$0.00 |
($250.00)
|
| Account
Balance |
$250.00 |
$750.00
|
| April 2009,
submit $250 from November 2008 |
($250.00)
|
$0.00
|
| Account
Balance |
$0.00 |
$750.00
| |
|
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What if I ask for reconciliation too
soon? Is there a downside?
Yes, there is a potential downside. If
you ask for reconciliation before you have submitted all of
your prior year expenses, you may deplete your account too
quickly with grace period expenses. If you then submit
expenses incurred from the previous year, those expenses will
be denied unless you have sufficient funds in your account.
How are grace period claims paid if I do
not have a current year account?
If you do not have a current year
account, grace period claims will be paid directly from your
previous year account, up to the available balance in that
account. The reconciliation process will not affect you. You cannot
take advantage of the grace period if your employment status changes
(you separate from Federal service or transfer to a Federal agency that
is not covered by FSAFEDS) on or before December 31.
What if I have an overpayment on my prior year account?
If you have an overpayment on your prior year account, we will apply your grace period expenses towards the overpayment to offset the amount, regardless of whether you select your current year account on your claim form.
How will grace period expenses be handled if I have paperless reimbursement?
If you are enrolled in paperless reimbursement, grace period expenses will be paid
from your current year account, up to the available balance. During the final account
reconciliation, any eligible grace period expenses will be applied towards your prior year
account, up to the available balance. You may request an earlier reconciliation by contacting FSAFEDS.
How will my post-grace period claims be paid if my current year account
reaches zero because the balance was used to pay my grace
period claims?
If your current
year account is depleted as a result of grace period claims,
we will automatically reconcile your account so that expenses
incurred during the grace period will be applied to your prior
year balance, restoring the current year’s funds that were
used to pay them in the first place. The amount that we will
restore to your account will be based upon your prior year
balance and the amount of grace period claims submitted.
Let’s look at a couple of
examples to illustrate the process:
Example 1
During Open Season, Jane elected $500 for
her 2009 Health Care FSA (HCFSA). At the end of 2008, she has a
remaining balance of $200 in her 2008 HCFSA. Let’s assume Jane
has not requested reconciliation.
On March 10, Jane submits a
claim for out-of-pocket health care expenses with dates of
services (DOS) during the grace period totaling $600 and requests that it be
paid from her current year account.
Jane is reimbursed from her 2009 account, depleting the
balance. The remaining $100 is paid from 2008, leaving a
balance of $100.
On April 12, Jane submits a
claim requesting $50 reimbursement for services rendered on
April 10. Since her 2009 HCFSA was depleted to
reimburse for grace period expenses, we need to reconcile her
account immediately in order to process her claim for 2009
expenses. This allows us to apply $50 to her 2008 account and
credit $50 to her 2009 account. We can then reimburse her
April 12 claim from 2009, leaving a balance of $50 in her 2008
account. If she finds any additional 2008 eligible expenses
and submits them before the April 30, 2009 deadline, she will be
reimbursed up to the $50.
Here’s an illustration of
this example:
|
Benefit
Period |
| 2008 |
2009 |
| Balance/Election
|
$200.00 |
$500.00 |
| Grace Period
Claims Total |
($100.00) |
($500.00) |
| Remaining Balance
|
$100.00 |
$0.00 |
| 4/10 claim for
$50.00 received; conduct forced true-up (up to available
balance) |
($50.00) |
$50.00 |
| Account Balance
|
$50.00 |
$50.00 |
| Process 4/10
claim in 2008 |
$0.00 |
$0.00
|
Example 2
For this example, let’s say the April 12
claim is for $150 to be paid from her current year account. After paying her $600 claim, Jane’s
balances for her current and prior year HCFSAs are $0 for 2009
and $100 for 2008.
Since Jane’s 2009 HCFSA was
depleted by grace period expenses,
we need to reconcile her account immediately in order to
process her claim for 2009 expenses. We apply $100 from her
2008 account and credit $100 to her 2009 account. We then
process her 2009 claim, and deny $50 since she has depleted
funds from her current and prior year HCFSAs.
Here’s an illustration of
this example:
|
Benefit
Period |
| 2008 |
2009 |
| Balance/Election
|
$200.00 |
$500.00 |
| Grace Period
Claims Total |
($100.00) |
($500.00) |
| Remaining Balance
|
$100.00 |
$0.00 |
| 4/10 claim for
$150.00 received; conduct forced true-up (up to
available balance) |
($100.00) |
$100.00 |
| Account Balance
|
$0.00 |
$100.00 |
| Process 4/10
claim in 2008 |
$0.00 |
$0.00
|
Grace Period Example Scenarios
Below are several example scenarios that
illustrate how the Grace Period process will work.
Scenario 1
Joe elected a $2,000 HCFSA for 2009.
On December 31, 2008, Joe has a $200 balance remaining in his 2008
HCFSA. On February 4, 2009, Joe submits a claim requesting
reimbursement for $200 of out-of-pocket health care expenses
that he incurred in January 2009 (during the grace period) and chooses to be
paid out of his 2009 account.
FSAFEDS will first reimburse Joe $200
from his 2009 HCFSA. On the last Friday of the month in which
Joe asks for his account to be reconciled (or automatically
mid-June) FSAFEDS reconcile his
account. During reconciliation, we identify that there is $200
remaining in Joe’s 2008 account and that Joe incurred and
submitted $200 of eligible grace period expenses.
Joe’s 2009 account will be credited $200 and his 2008 account
will reflect a $200 debit. His 2008 account balance will equal
zero and he will not have forfeited any monies.
Scenario 2
Jane has $500 remaining in her 2008
HCFSA on December 31. During Open Season, Jane re-enrolls in
FSAFEDS for 2009 and elects $1,000 for her HCFSA. On January
15, 2009, Jane submits a claim requesting reimbursement of
$500 to be paid from her 2009 account for out-of-pocket health care expenses incurred during the
grace period.
Jane’s claim is processed and she is
reimbursed $500 from her 2009 HCFSA, leaving a balance of
$500. She submits another claim for $200 on April 5th for
expenses incurred outside of the grace period to be paid from her current year
account. She is again
reimbursed from her 2009 HCFSA account, leaving a balance of
$300. Her 2008 account still equals $500.
During the auto-reconciliation of
Jane’s accounts that occurs mid-June, FSAFEDS identifies
that Jane has a 2008 account balance and that Jane incurred
expenses during the grace period. Her 2009 HCFSA is credited
$500 (bringing her 2009 balance to $800) and her 2008 HCFSA is
debited $500, depleting her 2008 account. Since the $200
expense she submitted in April was incurred after the grace
period deadline of March 15, it does not affect her account
reconciliation.
Scenario 3
At the end of December, Ken has $300
remaining in his 2008 DCFSA. Ken re-enrolls for 2009 electing
$520. In late March, Ken submits a claim for $400 of dependent
care expenses he incurred between January 1 and March 15 (the
grace period) to be paid from his 2009 account. At the time his claim is processed, his 2009
dependent care account has a balance of $100.
Ken’s claims will be processed and
paid from his 2009 account, depleting the available balance of
$100. The remaining $300 will immediately be processed and
paid from his 2008 dependent care account. His 2008 account
will then equal zero. Ken will receive one reimbursement check
for the total $400, but he will receive two reimbursement
statements – one for his 2008 account and one for his 2009
account.
Scenario 4
On December 31, Tony has $500
remaining in his 2008 HCFSA. Tony re-enrolls for 2009 with a
$2,500 annual election. Between January 25 and February 15, claims totaling $250 in eligible expenses are submitted.
Because Tony is enrolled in paperless reimbursement, the $250
will be processed and paid from his 2009 account. Since the claims he submitted were
incurred during the grace period, he decides he wants to
reconcile his account. Tony contacts FSAFEDS on March 5 and
requests a reconciliation of his account. He is advised that
once the reconciliation occurs, it cannot be reversed. He
agrees and requests that his account be included.
On the last Friday in March, the
monthly reconciliation is conducted on Tony’s account along
with any other participant who requested it for that month. A
total of $250 is credited to his 2009 account and debited from
his 2008 account, leaving a balance of $250 in his 2008
account.
On April 29, Tony finds receipts
totaling $300 for over-the-counter item he purchased in
October 2008. Since the FSAFEDS deadline for filing claims is
April 30, 2009 for the 2008 Benefit Period, he faxes a claim form and documentation to FSAFEDS
immediately to beat the deadline. FSAFEDS receives and
processes the claim. However, Tony is only reimbursed $250 of
that $300 as that is the amount of his remaining 2008 balance.
He was not reimbursed the entire $300 since he had already requested $50 to be reconciled (or moved)
from the 2008 account to the 2009 account.
Scenario 5
On December 31, Mary has a balance of
$225 in her 2008 HCFSA. Mary has enrolled for 2009 with a
$2,500 annual election. During the grace period, she submits
four claims for $25, $50, $25 and $125 in eligible expenses,
for a total of $225 and does not specify from which plan year to pay.
Each of her claims are processed and
paid from her 2009 account. Since the claims she submitted
were incurred during the grace period, Mary decides to
reconcile her account. On February 20, she contacts FSAFEDS
and requests reconciliation. She is advised that once
reconciliation occurs, it cannot be reversed. She agrees and
requests that her account be included.
On the last Friday in February,
monthly reconciliation is conducted for Mary and other
participants, who requested their account to be reconciled
during February. A total of $225 is credited to her 2009
account and debited from her 2008 account. Her 2008 account
now equals zero.
On April 15, Mary finds receipts
totaling $100 for prescriptions filled in November 2008. Since
the FSAFEDS deadline for filing claims is not until April 30, 2009 for the 2008 Benefit Period,
Mary has time to submit additional claims. She submits a claim
form to FSAFEDS with the 2008 receipts she found. FSAFEDS
processes her claim, but denies the expense because Mary no
longer has a balance in her 2008 account. Mary does not
forfeit any money; her 2008 expenses are simply greater than
the amount she had elected in 2008. If she had waited to reconcile her account,
she could have been reimbursed for $225 (her remaining balance) of the $225 claim.
Scenario 6
At the end of December, Diane has $400 remaining in her 2008 HCFSA. She has
enrolled for 2009 with a $2,000 annual election. She submits claims on February 16 in the amounts
of $200, $25, and $175 and chooses to pay these from her prior year account because she does not want
to forfeit any funds.
Each of her claims are processed and paid from her 2008 account as
requested. At this point her 2008 balance has been depleted.
On April 29, 2009, Diane finds receipts totaling $255 from December 2008 and since
the FSAFEDS deadline for filing claims is not until April 30, 2009 for the 2008 Benefit Period, she knows she has time to submit an additional claim. She
submits a claim form to FSAFEDS with the 2008 receipts she found. FSAFEDS processes her claim, but denies the expenses because Mary
no longer has a balance in her 2008 account. If she had requested her $400 grace period expenses
be paid from her 2009 account, the $255 claim could have been paid.
Scenario 7
David has $100 remaining in his 2008 HCFSA at the end of the year. He re-enrolls for 2009 with a
$1,500 annual election. David knows for sure that he will not have any additional claims to
file for 2008.
David submits a $100 claim for prescription refills that he purchased on March 1
and chooses to be reimbursed from his 2008 account. FSAFEDS processes his claim (he still has
2008 funds and the expense occurred during the grace period) and that depletes his 2008 account.
David knows that if he later finds 2008 expenses, he would be unable to be reimbursed
because he depleted his 2008 account balance with grace period expenses.
Scenario 8
Howard has $100 remaining in his 2008 HCFSA at the end of the year. He enrolled
in a HDHP with an HSA for 2009 and re-enrolled with a LEX HCFSA under FSAFEDS. His annual election is $1,500.
Howard submits a $20 claim for Tylenol, Sudafed and sunscreen that he purchased
on March 1. He erroneously selects his 2009 account on the claim form. FSAFEDS processes
his claim from the 2008 account because these items are not eligible under his LEX HCFSA. He will still
receive his reimbursement but it will be taken from his 2008 account instead of his 2009 account. He will be
notified of this change on his reimbursement statement.
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What is HIPAA?
The Health Insurance Portability and Accountability Act, or HIPAA, addresses the security and privacy of health data. HIPAA helps ensure that all medical records, medical billing, and patient accounts meet certain consistent standards with regard to documentation, handling and privacy. HIPAA requires that all patients be able access their own medical records, correct errors, and be informed of how personal information is shared and used. This includes your health care FSA with FSAFEDS.
How can I authorize my spouse or other relative to have access and/or receive information on my account?
