General health care FSA questions
Here are answers to some commonly asked questions about health care flexible spending accounts (FSAs).
What is a health care FSA?
A health care FSA is an employer-sponsored benefit governed by ERISA that allows you to pay for eligible health care expenses with pre-tax income.
Who is Vanguard's FSA provider?
How much money can I contribute to an FSA?
The maximum amount you can contribute to the health care FSA is $2,700.
How can I determine the amount to contribute to my FSA?
First, take a look at your past year's out-of-pocket health care expenses. You can also use PayFlex planning tools to help you figure out how much to set aside and to calculate the tax savings on your contribution.
What types of expenses are eligible for reimbursement from the health care FSA?
Eligible expenses under the health care FSA include out-of-pocket medical, prescription, dental, and vision plan expenses. Certain over-the-counter medications are eligible only with a prescription from your doctor.
Restrictions apply to reimbursement for medical and nonpreventive prescription drug expenses if you're enrolled in the limited health care FSA. See Limited health care FSA for more information.
Can I use a health care FSA to pay for health insurance premiums?
No, you cannot use an FSA to pay for health insurance premiums. These premiums are already taken out of your paycheck before taxes.
Can the funds in a health care FSA be used for a child in college?
Yes, as long as you are claiming the child as a dependent.
What if I don't use my entire FSA balance?
- 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.
- At 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.
How do FSA contributions pay for my expenses?
Your annual contribution election is divided by the number of paychecks received for the year, and that amount is deducted from each paycheck before taxes. The funds are then deposited into the FSA and available for eligible expenses.
You can access funds for health care FSAs at any time, up to your annual pledge. To learn how to access the pre-tax balance in your health care FSA, see Health care flexible spending account: Overview.
Can I change my FSA election amount?
You cannot change your election amount during the plan year unless you experience a qualified life-event change (e.g., marriage, divorce, death of a spouse or dependent, birth or adoption of a child).
Can I use money from my dependent care FSA if I run out of money in my health care FSA?
No. Health care and dependent day care FSAs are two separate types of accounts. You cannot transfer money between them.
How can I access the money in my FSA to pay for health care expenses?
To learn how to access the pre-tax balances in your health care FSA, see Health care flexible spending account: Overview.
If I am a crew member covered by my spouse's medical plan, can I still contribute to an FSA?
Yes. However, if you elect a general purpose health care FSA while covered under a high-deductible health plan (HDHP) of your spouse's employer, your spouse cannot contribute to a health savings account (HSA). If you or your spouse is covered under a high-deductible health plan, you should elect the limited health care FSA so you and your spouse remain eligible for HSA contributions. See Limited health care FSA for more information.
I am in the Aetna HealthFund and have a health reimbursement arrangement (HRA). If I contribute to an FSA, which account is used first when paying medical claims?
For all medical claims, the money in your HRA will always be depleted first, even if you have an FSA balance for the prior year during the grace period. Once your HRA funds are exhausted, reimbursements will then be processed from your general purpose health care FSA.
Does a general purpose health care FSA balance from a prior year affect a health savings account (HSA)?
Yes. In order to be eligible to contribute to an HSA on January 1, you must deplete any prior-year general purpose health care FSA balance by the end of the prior year.
For example: You must deplete any general purpose health care FSA by December 31 of the current plan year to be eligible to make or receive HSA contributions on January 1 of the subsequent plan year.
Otherwise, because of the general purpose health care FSA's 2.5-month grace period, you cannot make or receive HSA contributions until April 1 of the subsequent plan year. You may not be able to contribute the maximum to your HSA for the year if you wait until April for eligibility.