Flexible Savings Account (FSA) FAQs
Can I be reimbursed for my spouse's deductibles, copays, or other out-of-pocket medical expenses?
Yes. Your FSA can be used to cover expenses incurred by you or any member of your family claimed as a dependent on your tax returns.
What happens if I terminate employment during the plan year?
You’ll have an additional period of time (a run-out period) after termination to submit claims for reimbursement. You can only be reimbursed for services provided while you were employed, unless you continue contributing to your FSA plan through COBRA. You’ll have until the end of the plan year to submit your dependent care expenses incurred during the plan year, as long as you were working or seeking work during the time you’re incurring expenses.
What if I do not use all the money in my account before the end of the year?
The IRS states that you’ll lose any money left in the account after the plan year run-out period. This is the "use-it-or-lose it" rule.
What if I incurred expenses at the end of the plan year, but I don't submit a claim by the end of the plan year?
At the end of the plan year, you will have a run-out period to submit claims for expenses incurred on services provided during the plan year. Check with your employer for dates.
Can I change the amount of money I set aside in my FSA during the plan year?
Generally, you cannot change your election amount until the next enrollment period. You may change your election during the plan year only if there is a status change. A status change typically includes marriage, divorce, birth or adoption of a child, death of a family member or an employment status change for yourself or your spouse.
If my child turns thirteen during the plan year, can I use the funds in the dependent care account for the entire year?
No. You may only be reimbursed for expenses incurred before your child's thirteenth birthday.
If I participate in dependent care, will I still be able to claim the dependent care tax credit on my federal income tax return?
You may not claim any other dependent care tax benefit for the tax-free amounts you receive through this plan. You may, however, claim expenses not reimbursed through your FSA.
What funds are available to me on the first day of the plan year?
The full amount of the medical election amount must be made available to you on the first day of the plan year. This requires that reimbursements from the plan be paid in advance of contributions. Dependent care funds, however, can only be reimbursed up to the amount already set aside in the account. Advance reimbursements for dependent care are not allowed.