How do I enroll in the Flexible Spending Account?
To enroll in the Health and/or Dependent Care FSA, you simply need to fill out the Enrollment Form or enroll online, if available, before the beginning of each Plan Year.
How do I make contributions to my flexible spending account?
Once you make your annual election, your employer will deduct this amount from your paycheck in equal amounts throughout the year, before taxes are taken out.
How would carryover impact a participant who changes from a healthcare FSA to a limited purpose FSA and vice versa?
It would not. Carryover allows amounts in a healthcare FSA – limited purpose or otherwise – to carry over into the next plan year. The Carryover option will follow the participant’s choice. If a participant elects a limited purpose FSA for the current plan year, and has a carryover, the carryover will follow them into the limited purpose FSA for the new plan year. Similarly, if the participant elects a healthcare FSA in the current plan year and has a carryover, the carryover will follow them into a healthcare FSA for the new plan year.
However, if a participant elects to participate in an HSA for the new plan year, and currently has a healthcare FSA, the participant should either spend all amounts in the healthcare FSA before the plan year ends, or enroll in a limited purpose FSA for the new plan year so they can contribute to the new HSA on the first day of the following plan year.
If a participant has a FSA carryover, but quits before they have used their funds, is that money then forfeited? Or will the terminated participant still have a run-out period to submit receipts for date-of-service up to their termination date?
If year-to-date contributions exceed the amount of reimbursements and there is a remaining balance, the employee has a COBRA election available for the remainder of the plan year. If they do not elect COBRA, then expenses can only be submitted up to the end of their termination run-out period after which and funds remaining would be forfeited.
If an employer has adopted the Carryover, must a participant have a new-plan-year FSA for the prior year’s balance to carryover?
No. Any funds remaining in an individual’s current plan year FSA will be automatically rolled into the new plan year even if the employee didn’t elect to participate in a new plan year FSA. The participant now has the chance to spend up to $500 of his/her carryover money on out-of-pocket healthcare expenses in the following year.