FSA must be sponsored by an employer and there are many variables the employer needs to select when setting up an FSA for their employees.

We listed below the key variables and those can be answered by someone from your HR or benefit team:

Does your employer support Healthcare FSA

Healthcare FSA is Different than Daycare or other FSAs. So you need to ensure your company enables it for it’s employees. You also need to check which FSA provider is providing this benefit (it’s likely to be different than your insurance provider)

When does your benefit year start?

Benefit year don’t have to align with calendar year and it’s important for you to know the year start date so you know what’s the last day for you to make an eligible purchase

Does your company support rollover or grace period or neither

Rollover allows you to transfer funds from this year to next year, if it’s enabled, check how much does your company allows to transfer to next year, according to the IRS it cannot exceed 20% of the max allowed contribution. For 2023 its $610.

Grace period allows you to make purchases up to 2.5 months after the benefit year ended. if it’s enabled, please check how long is your company’s grace period

Companies cannot enable both rollover and grace period but can decide not to enable either of these.

Does your company allows for a run-out period?

Run-out periods allow you to submit expenses you have made during the eligibility period even after the deadline for using the funds ended. It’s common to have a 90 days run-out period which means that if your deadline for using funds was 12/31/23 you can submit expenses made during 2023 all the way to 03/30/24

How much did you select to contribute for the year

The amount of funds you have depend on your selection during the open enrollment time not on how much you actual contributed to date. e.g. on 01/01/23 you have in your FSA account the entire amount you elected to contribute during the year although you will need the next 12 months to contribute this from your pay checks.

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