A health care flexible spending account (FSA) is a pre-tax benefit account used to pay for eligible medical, dental, and vision care expenses that are not covered by your insurance plan or elsewhere. Despite the general rule stated above:
The IRS determines which expenses are eligible for reimbursement.
The Online Member Service Center with SelectAccount allows you to access your account balance, submit claims, and review helpful resources on your HRA/VEBA and FSA accounts. To register:
Any unspent funds greater than $25 but less than or equal to $500 that remain in your health care FSA at the end of the 2017 will be carried over to the 2018 plan year. This carryover feature does not apply to the dependent care FSA.
Do carryover funds affect the health care FSA contribution maximums? No. Carryover funds are in addition to the annual limit on the health care FSA contributions ($2,650 for 2018).
When will the remaining prior plan year funds carryover into the new plan year? Carryover funds will be available on the first day of the new plan year. However, the amount of the carryover will not be determined until the end of the run-out period for the previous plan year.
During the run-out period, which account will be used first – the 2018 account or the carryover amount from the 2017 account? The 2018 (current) account will pay first and the 2017 (carryover) account will pay second. After the run-out period, any amount between $25 and $500 remaining in the 2017 will be added to the 2018 account balance.
Does an employee need to elect an FSA for the following plan year to have the FSA funds carryover? No.
Why aren’t amounts less than $25 eligible for carryover? The administrative fees and managerial tasks associated with accounts less than $25 would exceed the value provided to an employee for that account.
Is the carryover option available for the dependent care FSA? No, the carryover option is for the health care FSA only.