Flexible Spending Accounts (FSAs) allow you to set aside before-tax dollars from your pay to cover certain healthcare or child/elder care expenses in two separate accounts.
You may elect to participate in one account, both accounts or neither account. To participate, you must actively re-enroll each year during annual open enrollment. Your elections do not automatically continue from one year to the next.
As a regular full-time or part-time management employee, you are eligible to participate on your date of hire. Review the Flexible Spending Accounts (Reimbursement Accounts) Summary Plan Description (SPD) for details.
The HFSA may be used to pay for eligible healthcare expenses for yourself, your spouse and your eligible dependents.
The DFSA may be used to pay for eligible child/elder care expenses that allow you to work, or if you are married, that allow both you and your lawful spouse to work or your lawful spouse to attend school full time.
How the Accounts Work
You do not pay taxes on the payments you receive from the accounts, but you cannot deduct expenses that are reimbursed through the accounts from your federal income taxes.
Additionally, you cannot start or stop contributing or change your contribution amounts in either account during the year unless you have a Life Event (qualified status change).
If you contribute more to the accounts than you claim in expenses during the year, federal law requires you to forfeit the leftover money in your accounts. If you do not use all the funds you set aside for the Plan Year, they cannot be reimbursed to you, they cannot be carried over to the next Plan Year and they cannot be transferred between the HFSA and the DFSA, or vice versa.
An HFSA Debit Card Is Available
If you contribute to the HFSA, you will automatically receive a debit card at no cost the first time you enroll. This card makes it easy for you to pay for eligible expenses directly from your account — simply use your card at the time of purchase just like you would use a credit card. The funds will be automatically deducted from your account, so you do not need to pay out-of-pocket and then wait for reimbursement. You can even use the card to purchase mail-order prescription drugs and contact lenses. However, you will need to continue submitting claims to receive reimbursement for any eligible expenses not purchased with the card.
Cards are not available for the DFSA.
HFSA — You can contribute a minimum of $100 or up to a maximum of $2,600 on a before-tax basis to each individual account, in $1 increments.
DFSA — You can contribute a minimum of $100 or up to a maximum of $5,000 on a before-tax basis to each individual account, in $1 increments.