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What is a Flexible Spending Account?
A Flexible Spending Account, or FSA, is an employee benefit program that allows you to set aside money, on a pre-tax basis, for certain health care and dependent care expenses. That means YOU keep MORE of your MONEY. FSAFEDS offers three types of accounts:
A Health Care FSA (HCFSA) is used to pay for eligible health care expenses that are not covered under your insurance plan, such as co-payments and over-the-counter medicines, such as Tylenol and Sudafed. It is sometimes referred to as a general purpose HCFSA
A Limited Expense Health Care FSA (LEX HCFSA) is used in place of the general purpose Health Care FSA if the participant enrolled in a High Deductible Health Plan with a Health Savings Account (HSA). The Limited Expense HCFSA allows you to submit eligible dental and vision expenses only.
A Dependent Care FSA (DCFSA) is used to pay for childcare or adult dependent care expenses that are necessary to allow you and your spouse, if married, 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. 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)?
I have a Health Savings Account. Can I still participate in FSAFEDS?
Yes! While you are not eligible to enroll in a standard Health Care FSA, you do have the option of enrolling in the standard Dependent Care FSA (DCFSA) and/or a Limited Expense HCFSA. The Limited Expense HCFSA allows you to set aside money, on a pre-tax basis, to pay for eligible vision and dental expenses.
See the Limited Expense HCFSA for more information.
What is the Grace Period?
The grace period provides more time for you to use the funds in your FSA account. The U.S. Department of Treasury has ruled that employers who offer flexible spending accounts under a cafeteria plan can extend the FSA Benefit Period from December 31 to March 15 of the following year, providing a grace period during which eligible expenses can be incurred and reimbursed. The intent is to help account holders avoid forfeiting any of the funds they deposited in FSA accounts.
For more information, refer to the Grace Period.
How will my Grace Period claims be paid?
If you 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 claim form from which plan year you want each expense paid. If you do not select a plan year, all expenses with current year dates of service, including all expenses incurred during the grace period (January 1 to March 15), will be paid from your current year account.
You have until April 30 to submit claims against your prior year account. Following the deadline for filing claims against your prior year accounts, 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 July 15 or can occur earlier, at your request.
For more information, refer to the Grace Period.
How do I know if my expense is eligible?
The FSAFEDS Eligible Expenses Juke Box provides a detailed listing of the most common expenses online at www.FSAFEDS.com. If you do not find the item in question, you may 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.
Is there a way to submit claims without all the paperwork?
Yes! Paperless Reimbursement (PR) allows participants the option of having claims submitted to FSAFEDS directly by their FEHB Plan, thus eliminating the need for to submit hard copies via fax or mail. We currently have several FEHB plans and one FEDVIP vision plan participating and each handles claims differently. All our participating FEHB Plans may take up to four weeks to forward medical/dental/retail pharmacy claims and up to six weeks for any mail-order pharmacy claims. For specific information, such as what claims are forwarded to FSAFEDS under the Paperless Reimbursement program, refer to the Paperless Reimbursement Quick Reference Guide and select your FEHB Plan. If your FEHB plan participates in PR, you may enroll outside of Open Season by logging into MY Account Summary and selecting Paperless Reimbursement from the menu.
What happens if my claim is denied?
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:
- A claim or request that is not paid in full
- A product or service determined to be ineligible that you believe is eligible
- Your request to change your election due to a Qualifying Life Event that is not approved
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. If you are not satisfied after asking us to review your claim, you may submit a formal appeal in writing to FSAFEDS for reconsideration within 60 calendar days of the initial decision.
For more information on how to file an appeal, please see How do I appeal a claim that has been denied? on the Summary of Benefits with Frequently Asked Questions.
What does “medically necessary” mean?
Some expenses are eligible for reimbursement only when a doctor or licensed health care practitioner certifies that the service/procedure is medically necessary. A few examples include wigs due to chemotherapy/radiation treatment, cosmetic surgery following an accident or surgery, etc. You must submit a Letter of Medical Necessity with the claim for it to be approved. It details the diagnosis, recommended treatment, length of treatment and how it will alleviate your medical condition. If the treatment extends beyond the timeframe included on the original form submitted, you must submit a new Letter of Medical Necessity for the treatment to continue to be eligible.
Is mileage to and from my doctor's office, as well as parking fees, reimbursable?
Yes, under a health care FSA, your travel to and from the doctor's office as well as any parking fees associated with your visit are reimbursable, provided you have a receipt that validates your visit. See “Mileage” under the FSAFEDS Eligible Expenses Juke Box for more information.
What is the “use-or-lose” rule?
IRS regulations stipulate that any money remaining in your FSA account after March 15 of the following year, for which you have not incurred eligible expenses, cannot be rolled over - - you use it or lose it . So, it's very important that you plan carefully when deciding on how much to allot in your FSA account(s). The FSAFEDS Calculator and the Dependent Care Tax Credit Worksheet can assist you in determining your annual allotments.
Can I access my account information online?
Yes! Your account information is available 24/7 via My Account Summary. You can update your personal information and follow the status of your claims by selecting My Claims from the left-hand menu. Information is available regarding both your current and previous year accounts.
Still have questions regarding your account? You may 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.
Can I transfer money between my Health Care Flexible Spending Account, Limited Expense Health Care Flexible Spending Account and Dependent Care Flexible Spending Account?
No. The amount you designate to a Health Care, Limited Expense Health Care or Dependent Care Flexible Spending Account is used solely for those expenses. The funds cannot be transferred from one account to the others.
How do I change my annual election?
During Open Season, you can make as many changes to your annual election as needed. Outside of Open Season, you are only allowed to change your election if you experience a Qualifying Life Event, such as divorce or death of a spouse. Refer to the Qualifying Life Event QRG for more information.
How do I get reimbursed from my Flexible Spending Account(s)?
With Health Care and Limited Expense Health Care Flexible Spending Accounts, your entire election is available to you from the first day of your Benefit Period. And, we can begin to reimburse your eligible expenses as soon as we receive your first allotment even though you have not contributed your total annual election.
With a Dependent Care FSA, you can only be reimbursed up to the amount currently available in your account. If your claim is for more than is currently available, you would be reimbursed up to that balance and the remaining amount would be pended until your next allotment is received.
What is a Qualifying Life Event?
A Qualifying Life Event (QLE) is a major life event that allows you to change your election during the Benefit Period. A few examples of a QLE include a change in marital status, birth or adoption of a child or the death of a spouse. For more information, refer to the QLE Quick Reference Guide.
What happens if I separate or retire before the end of the Benefit Period?
The balances in your HCFSA or LEX HCFSA (you can’t be enrolled in both types of accounts at the same time) and DCFSA are treated differently if you separate before the end of the Benefit Period.
Your HCFSA or LEX HCFSA will terminate as of the date of your separation. There are no extensions. Any health care expenses incurred prior to the date of separation will still be reimbursable but those incurred after the date of separation will not. 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 used up, whichever comes first.
What happens if I change agencies during the Benefit Period?
As long as your new agency participates in FSAFEDS, your account will remain active. Your participation terminates, if you transfer to an agency that is not covered by FSAFEDS.
We strongly suggest that you notify FSAFEDS if you are leaving, transferring, or re-joining a Federal agency that participates 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.
How is my effective date determined if I enroll outside of Open Season?
If you enroll in FSAFEDS with a Belated Enrollment or as a new/newly eligible employee, your election will generally be effective the next business day after you enroll, but not before January 1. You may elect up to the full amount for the HCFSA and DCFSA. However, there is no proration. Only expenses incurred on or after your effective date through the end of the Benefit Period are eligible for reimbursement.
If you are a newly eligible employee due to a QLE, your election will be effective on the first day of the first pay period that starts after your election is approved by FSAFEDS. No enrollments—belated or otherwise—are accepted on or after October 1 of any Benefit Period.
How much can I elect for a Health Care, Limited Expense Health Care or Dependent Care Flexible Spending Account(s)?
The maximum annual election is $5,000 and the minimum is $250.