Vanguard's Benefit Plan offers two types of flexible spending accounts (FSAs), a health care FSA and a dependent day care FSA.
You may elect to participate in one, both, or neither of these accounts. This page explains the health care FSA. For information on the dependent day care FSA, see Dependent day care FSA: Overview.
Your health care FSA
When electing to participate in the health care FSA, you authorize Vanguard to set aside a specific amount from each paycheck (before taxes are calculated and deducted) and to contribute that amount to your FSA. (Because Social Security or federal income taxes are not paid FSA deposits, yearly take-home pay is effectively increased.)
Then, as you incur eligible expenses, you can request reimbursements. See How to access your FSA balance below for more information.
You can choose between two types of health care FSAs:
- General purpose health care FSA.
- Limited health care FSA.
In most cases, if you elect the Aetna HealthFund, you would elect the general purpose health care FSA. If your spouse is enrolled in a high-deductible health plan (HDHP), however, you should consider electing a limited health care FSA so your spouse remains eligible to make and receive HSA contributions.
If you elect the HDHP, you should elect the limited health care FSA.
Important IRS rules
IRS rules do not allow contributions to a health savings account (HSA) if you are covered by any disqualifying health coverage, including a general purpose health care FSA. You may, however, have coverage under a limited health care FSA and still remain eligible to make and receive HSA contributions.
Under a limited health care FSA, you cannot receive reimbursement for medical and nonpreventive prescription drug expenses before meeting the HDHP deductible. You can use a limited health care FSA to receive reimbursement for dental, vision, and preventive care prescription drug expenses at any time. After you have met the HDHP deductible, you can use the FSA to reimburse all eligible health care expenses.
- You cannot stop or change the amount deducted from each paycheck unless you experience a permitted change in family status.
- Expenses reimbursed under your limited health care FSA cannot be reimbursed under any other plan, including an HSA.
- Expenses paid through an FSA cannot be claimed as a tax deduction or tax credit on a federal income tax return.
- You cannot make or receive contributions to an HSA if you are covered by any disqualifying health coverage, including a general purpose health care FSA.
- It is important to estimate future out-of-pocket health care expenses carefully:
- Money deposited into a health care FSA can be used only for eligible health care expenses.
- You cannot use the health care FSA and dependent day care FSA accounts interchangeably.
- You can deposit up to $2,700 annually into a health care FSA.
- Crew married to crew may contribute up to $2,700 each.
- You have until December 31 of the current plan year to incur eligible expenses for FSA reimbursement.
- You have until May 31 of the following plan year to submit a claim for reimbursement for eligible expenses. Note: May 31 does not refer to the postmark date; it is the date by which the claim form must be received.
- As the end of the current plan year, any unused balance up to $500 will carry over and be available for the following plan year’s eligible expenses. Any unused balances in excess of $500 will be forfeited, so estimate your annual pledge carefully.
- Debit card transactions: If you enroll in a general purpose health care FSA, you will receive a debit card to pay for prescription drug expenses, such as copays, coinsurance, and eligible over-the-counter expenses. Visit the PayFlex website for a full list.
- Auto Pay process:
- The Auto Pay feature is activated at the beginning of each new plan year, but you can opt out at any time by contacting PayFlex or Aetna.
- Medical and general dentistry claims will be automatically sent to PayFlex when you present your ID card and pay the required coinsurance or deductible at the office.
- Once the claim is processed, PayFlex will reimburse your out-of-pocket expense by check or direct deposit to your authorized bank account. The turnaround time is typically three to five business days from the date the claim is processed.
- Orthodontia and vision claims will not use Auto Pay. You must submit a reimbursement request for these expenses.
- Reimbursement request:
- To be reimbursed for an out-of-pocket purchase or an eligible health care expense after opting out of Auto Pay, submit a reimbursement request and supporting documentation, such as a receipt or Explanation of Benefits.
- Reimbursement requests may be completed online, via the mobile app, or by submitting the FSA claim form.
- A reimbursement is required for all orthodontia, vision, and limited FSA reimbursement requests.
- Once a claim is approved, you should be reimbursed by check or direct deposit to your authorized bank account within seven business days of receipt of the claim.
Eligible health care FSA expenses
A health care FSA allows you to pay for eligible health care expenses with pre-tax income.
For more information on the health care FSA, including eligible expenses and HDHP restrictions, see Health care FSA: Q&A.
FSA claim deadlines
How to access your FSA balance
General purpose health care FSA
General purpose health care FSA participants have three options to access their pre-tax FSA balance:
Limited health care FSA
Limited health care FSA participants must always submit a reimbursement request to access their pre-tax FSA balance, as debit card and Auto Pay are not available for the limited FSA.