Tag: FSA

Question: If an employee has money left in his or her healthcare flexible spending account (FSA) to roll over, but decides to enroll in the company health savings account (HSA) at the new plan year instead of the FSA, what happens to the excess funds from this year? Can the employee use those funds for other…

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…

Question: Can an employee pay the cost of preschool with a dependent care flexible spending account (FSA)? Answer: Expenses for a child in nursery school, preschool, or similar program for children below the level of kindergarten are considered reimbursable expenses for dependent care. These programs may provide an educational and or social experience; however, the primary…

Question: What is the grace period after the plan year ends for an employee with a Dependent Care FSA to use the funds? Answer: The IRS allows for a grace period of up to two months and 15 days after the plan year ends. However, an employer may adopt a different grace period within that…

Question: Can an employee enroll in FSA and still have an HSA account, just not contribute to it? Answer: Once an employee is eligible for and establishes an HSA, the funds remain his/her property and s/he can use those funds tax free as long as they are used only for qualified medical expenses. According to IRS…

Question:  Can an employee who terminates employment but still has money in his flexible spending account (FSA) continue to use it for claims?  Or could that money be rolled over into his current HSA with his new employer? Answer:  Internal Revenue Code §125 regulations governing health care flexible spending accounts (HC FSA) do not permit…

Question:  We offer a Health Care FSA.  Can we add the carry-over provision this year (for 2013) or do we have to wait until next year? Answer:  If your current (2013) Health Care FSA plan does NOT include a grace period, you have the option of adding a carry-over provision now.  To do so, you…