What you need to know
Stretching your paycheck is easier when you spend tax-free dollars on eligible healthcare expenses. With a Health Care Flexible Spending Account (FSA), you set aside pretax dollars through automatic paycheck deductions—and reduce your taxable income in the process. Talk about a win-win.
Who can participate
You can contribute to a Health Care FSA for medical, dental and vision expenses as long as you’re not enrolled in a high-deductible health plan (HDHP). If you’re enrolled in an HDHP with HSA, you can contribute to a Limited Purpose FSA, and reimbursement is limited to dental and vision expenses only. (The HSA already gives you a tax benefit on medical expenses.)
How it works
The FSA is a limited-time offer; you can enroll only as a new employee, during the annual Open Enrollment period, or if you experience a qualified life event. Your participation—and some of the money you contribute—lasts only for the calendar year.
When you enroll in the Health Care FSA, you choose how much you want to contribute for the calendar year. You can set aside up to $3,200 for 2024. Your contributions are deducted from your paycheck before taxes are withheld.
Forma will send you a debit card that you can use to pay for your healthcare expenses. Keep your receipts! You could be asked to prove your expenses were healthcare-related.
Important rules
- You can carry over up to $640 of your unused balance from 2024 to 2025.
- You have until March 31 of the following year to submit current-year claims for reimbursement.
Eligible expenses
The IRS determines which expenses are eligible for reimbursement. You can use your Health Care FSA to pay for deductibles, coinsurance, copays, prescription and over-the-counter drugs, health supplies, and other eligible expenses. For a full list of eligible expenses, take a look at IRS Publication 502, Medical and Dental Expenses.
Keep in mind that if you’re enrolled in the HDHP with HSA, reimbursement under the FSA is limited to dental and vision expenses until you meet your health plan deductible.
Get more from your Limited Purpose FSA
Once you meet your health plan’s annual deductible ($1,500 for individual or $3,000 for family coverage), you can use the FSA for eligible medical expenses.
Using your FSA
Forgot your wallet? Dog ate your homework? For whatever reason you don’t use your FSA debit card, fear not—you have three other ways to submit reimbursement claims:
- Online
- Mobile app (download through the App Store or Google Play)
Please refer to the plan and policy documents for additional details on the plans, including exclusions, limitations and eligibility.