The Federal Flexible Spending Account Program (FSAFEDS) provides tax-advantaged flexible spending accounts that Federal employees can use to save on their eligible health care (HCFSA) and dependent care (DCFSA) expenses. By using pre-tax payroll contributions rather than post-tax salary to pay for these out-of-pocket costs, participants save an average of 30 percent on their family's health, dental, vision, and day care expenses.
To be eligible for a health care flexible spending account, you must be employed by an agency that participates in FSAFEDS and be eligible to enroll in the Federal Employees Health Benefits Program (FEHB), though you do not actually need to be enrolled in FEHB.
To be eligible for a limited expense health care flexible spending account (LEX-HCFSA), in addition to the above, you must be enrolled in or covered by a High Deductible Health Plan with a Health Savings Account. A health savings account allows employees to pay out-of-pocket health expenses pre-tax, so FSAFEDS participants who have a health savings account can elect this limited expense flexible spending account that only reimburses eligible dental and vision expenses.
To be eligible for a dependent care flexible spending account, you must be employed by an agency that participates in FSAFEDS. You are not required to be eligible for FEHB. Intermittent and When Actually Employed (WAE) employees are not eligible for dependent care accounts. You and your spouse must be working, looking for work, or attending school full-time to be eligible for a dependent care account. You and your spouse must earn income during the year, even if looking for work, but not if attending school full-time.
Participants can have both a dependent care flexible spending account and a health care or limited expense health care flexible spending account.
The HCFSA and LEX-HCFSA Benefit Period run from Jan 1 – Dec 31. Expenses incurred during that window can be filed through April 30th of the subsequent year. If you have not exhausted your health care or limited expense account by December 31st, FSAFEDS will automatically carry over up to $500 of unspent funds into your health care or limited expense FSAFEDS account the next calendar year. To be eligible for carryover, you must be employed by an agency that participates in FSAFEDS and actively making allotments from your pay through December 31 of the original benefit period. You must also actively reenroll in a health care or limited expense account during Open Season to use carryover. Your reenrollment must be for at least the minimum of $100. If you do not reenroll, or if you are not employed by an agency that participates in FSAFEDS and actively making allotments from your pay through December 31st, your funds will not carry over and will be forfeited.
The DCFSAs Benefit Period runs from January 1 of the current Benefit Period through March 15 of the following year. This includes a 2 ½ month grace period from January 1 through March 15 of the following year. During the grace period, eligible expenses incurred from January 1 through March 15 of the following year can be applied towards your prior year's balance. The intent is to help account holders avoid forfeiting any of the funds they deposited in FSA accounts. It is important to carefully consider the amount you choose to elect. The filing deadline for claims against the prior year account (including claims incurred during the "grace period") is April 30. DCFSA are not eligible for carryover.
By law, annuitants are not eligible to participate in flexible spending account programs such as FSAFEDS.
Eligible employees can enroll in FSAFEDS during the annual Federal Benefits Open Season in November and December. New and newly eligible employees can enroll outside of Open Season within 60 days of their start date, but such an enrollment must take place on or before September 30. Eligible employees can also enroll outside of Open Season within 60 days of a Qualifying Life Event (QLE) such as marriage or birth, but such an enrollment must take place on or before September 30. Newly eligible and QLE employees who miss the September 30 deadline can enroll during Open Season.
Unlike some other benefits, FSAFEDS enrollments do not renew automatically each year. Participants must actively enroll each Open Season if they wish to have a flexible spending account in the next year.
To enroll, visit the FSAFEDS website or call 1-877-FSAFEDS (372-3337). TTY 1-800-952-0450.