If I use funds from my Medical FSA for medical expenses, can I claim a deduction on my income tax?
No. Because eligible expenses are paid with tax-free dollars from your Medical FSA, you cannot claim the same expenses on your income tax return (no double-dipping).
What will I need to report on my tax return about my Medical FSA contributions?
Information about a Medical FSA does not need to be reported on your tax return. Your W-2 form will not include any tax-free amounts that you contribute to your Medical FSA.
Can I use my Medical FSA for transportation expenses related to eligible medical care?
Yes, transportation expenses (e.g. tolls, parking fees, mileage) required to obtain eligible medical care are eligible for reimbursement. For tolls and parking fees, your claim must be accompanied by a receipt showing the provider, the date of service, and the amount of the expense. Actual mileage incurred with an automobile must be indicated as follows […]
Is a warranty for contact lenses/eyeglasses an eligible expense under a Medical FSA?
No. A warranty is like an insurance policy and is not associated with a specific medical service that has already been provided.
Are my medical insurance premiums eligible expenses under my Medical FSA?
No, insurance premiums of any kind are not eligible expenses per IRS regulations.
Are co-payments and deductibles eligible expenses under my Medical FSA?
Yes, co-payments and deductibles are eligible expenses.
Can the funds in my Medical FSA be used for my spouse and dependents?
Yes. The funds in your Medical FSA can be used for eligible medical services provided for you, your spouse and/or any of your eligible dependents.
My spouse is also offered a Medical FSA at work. Can each of us elect the maximum amount allowed under our respective plans?
Yes. You and your spouse may each elect the maximum amount allowed by your respective plans. However, you cannot receive payment for the same services from both plans (no double-dipping).
What medical services are eligible under my Medical FSA?
In general, eligible services are those that are used primarily to diagnose, prevent, treat or mitigate a physical or mental defect or illness. Services provided for cosmetic reasons and those that are merely beneficial to one’s general health are not considered expenses for medical care.
What is a Medical Flexible Spending Account (FSA)?
A Medical FSA is an account that allows tax-free dollars to be used for payment of eligible medical services not covered or reimbursed by any other source. Medical FSAs are governed by Sections 125, 105, 106 and 213 of the Internal Revenue Code.
I am a participant in the plan for this current plan year, but will not re-enroll in the plan for the next plan year. Does the extended grace period rule apply to me at the end of this current plan year?
Yes. As long as you are a participant in the plan through the end of the plan year and have funds remaining at the end of the plan year, you may submit claims for eligible services provided during the extended grace period.
If I terminate employment during the plan year, does the extended grace period apply to me?
No. You must be a participant in the plan on the last day of the current plan year to take advantage of the extended grace period. Note: the exception to this rule is when COBRA (if offered by your employer) is elected for the account.
What is the length of the extended grace period?
If your plan includes the extended grace period, it is for 2-1/2 months after the end of the current plan year. You should refer to your Plan Highlights for the time frames that are applicable to your plan.
What is an extended grace period? (FSA)
IRS Notice 2005-42 modifies the Use-or-Lose Rule to allow participants to access any unused amounts remaining in a Flexible Spending Account (FSA) at the end of the plan year to reimburse eligible expenses provided during a grace period after the close of the plan year. Note: The IRS does not require plans to include the […]
If I terminate employment, can I receive a refund for the cash balance remaining in my FSA?
No. IRS regulations do not allow this.
What happens if my employment terminates before the end of the plan year?
Your Medical FSA will terminate as of the date your employment terminates. Eligible medical services provided prior to your date of termination will still be eligible for reimbursement, but services provided after the date of termination will not be eligible unless you are eligible for and elect to continue coverage under COBRA. See additional information […]
Will my FSA election automatically continue after my current plan year ends?
No. You must enroll again before the beginning of each new plan year. This gives you a chance to change your election each plan year as your circumstances change.
If I elect too much for my FSA during the plan year and cannot use it, what happens to the extra funds?
Refer to your Plan Highlights regarding unused FSA funds. Any forfeited funds are returned to your employer, but the IRS has imposed strict regulations on the use of these funds (they cannot be refunded to the employees who forfeited them). Employees should be conservative when estimating the amount to elect for an FSA.
Can money in a Medical FSA be used for a Dependent Care FSA?
No. Money directed to one type of Account can be used only for expenses relating to that Account. This is true even if all the money in one Account is not used and the other Account runs short.
Are expenses eligible if services are provided prior to my effective date in the Plan?
No. Services must be provided on or after your effective date.
Who is responsible for determining if an expense is eligible?
Eligibility of expenses is dictated by the IRS and those guidelines are used by Benefit Resource. The services of an attorney are utilized if an additional opinion is needed or research is required to clarify the eligibility of an expense.
What dollar amount is available in my FSA?
The amount available for a Medical FSA = the total amount you elected for the current plan year minus any prior payments and reimbursements. The amount available for a Dependent Care FSA = the total payroll deductions posted to your Account for the current plan year minus any prior payments and reimbursements.
Since I will not pay Social Security taxes on money contributed to an FSA, will my Social Security benefits be lower when I retire or if I become disabled?
Tax-free contributions may slightly reduce your Social Security benefits. However, the value of your tax savings with an FSA should more than offset the slight reduction in Social Security benefits in future years.
What employee taxes are eliminated by contributing to a Medical or Dependent Care FSA?
You will not pay federal income tax, Social Security tax and most state taxes (varies by state) on contributions to a Medical and/or Dependent Care FSA.
