From the Hotline: FSA Participation During Leave
Question: When an employee is on leave, can the employee continue participating in a flexible spending account (FSA) program and make catch up contributions upon return to employment?
Answer: Yes, the employee may make catch-up contributions to a health flexible spending account (FSA) upon returning from leave, assuming the employer’s benefit plan document allows for this.
However, dependent care FSAs are treated differently because they are not a health benefit and do not require continuation during Family and Medical Leave Act (FMLA). Claims for reimbursement under the dependent care FSA are only allowed for “short, temporary absences.” Generally, a short, temporary absence is considered to be two weeks or less. If the employee is out for longer than a short, temporary absence, reimbursement for dependent care is not covered. Once the employee returns to work, claims for dependent care received after the return to work may be submitted.