Helping Federal Employees and Annuitants Understand Their Benefits

 

Federal Flexible Spending Account Program

FSAFEDS



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Updated 11/23/2016

 

Under the IRS Code, annuitants (other than re-employed annuitants whose employment status is full-time) cannot participate in an FSA. An FSA is a way to set aside part of your salary "before taxes" for payment of eligible expenses. An annuity is not considered salary.

If you're an employee who works for an Executive branch agency or an agency that has adopted the Federal Flexible Benefits Plan ("FedFlex"), you can elect to participate in the Federal Flexible Spending Account Program (FSAFEDS).

FSAFEDS allows active federal employees to save money for health care expenses with a Health Care or Limited Expense Health Care FSA.  The FSA works like a savings account that helps you pay for items that typically aren’t covered by your FEHB Plan, the Federal Employees Dental and Vision Insurance Program, or other health insurance coverage. FSAFEDS also offers an account for families with young children or elder care expenses – the Dependent Care FSA.

Eligible employees can enroll in FSAFEDS each year during the Federal Benefits Open Season (the November/December timeframe).  Open Season enrollments are effective January 1 of the following year.  Current enrollees must remember to enroll each year to continue participating in FSAFEDS.  Enrollment does NOT carry forward year to year.

New and newly eligible employees who wish to enroll in this program must do so within 60 days after they become eligible, but before October 1 of the calendar year. For further information, visit www.FSAFEDS.com or call 1-877-372-3337. TTY 1-800-952-0450.

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FSA Reelection for 2016 2016 Open Season Update

The 2014 Benefits Administration Letter (BAL) 14-801 announced that health care flexible spending accounts (FSAs) will no longer have grace periods.  Instead, participants are now able to carry over up to $500 of unused funds to the next plan year if they re-elect to participate in their 2016 FSA account.  
 
This is a significant change.  If the employee fails to re-elect participation in their Flexible spending account program there is no longer a grace period to incur the medical expenses.  If you don't re-elect the FSA (medical) there is no account in which to carry over the un-used funds.  Without the reelection, the employee will forfeit any money remaining in their account unless the expenses were incurred by 12/31 of the current year and claims are submitted by April 30 of the following year.

 
Take advantage of the FSA program this open season and don't forget to re-elect participation in the program. 

 

Eligibility

If you are eligible for the Federal Employees Health Benefits (FEHB) Program and are an active employee of the Executive Branch or of another agency that participates in FSAFEDS, you are eligible to participate in a health care FSA with FSAFEDS. You need only be eligible to participate in FEHB, you do not need to be currently enrolled.

There is no household limit on the amount of money that you can set aside for a HCFSA or LEX HCFSA, although the FSAFEDS limit per Federal employee is $5,000 ($10,000 for a "Federal couple"). If your spouse is not a "Fed", and has access to an FSA, he or she may enroll up to the maximum of his or her own company's health care account.

A LEX HCFSA is for employees enrolled in a Federal Employees Health Benefits (FEHB) Program High Deductible Health Plan (HDHP) with a Health Savings Account (HSA), or whose spouse is enrolled in a non-FEHB HDHP with an HSA. The LEX HCFSA is limited to eligible dental and vision expenses only. Under IRS rules, you are not eligible to contribute to an HSA and be enrolled in a FSAFEDS general purpose HCFSA at the same time. 

Under the IRS Code, annuitants (other than re-employed annuitants whose employment status is full-time) cannot participate in an FSA. An FSA is a way to set aside part of your salary "before taxes" for payment of eligible expenses. An annuity is not considered salary.

Enrollment

Eligible employees can enroll in FSAFEDS each year during the Federal Benefits Open Season (the November/December timeframe). Open Season enrollments are effective January 1 of the following year. Current enrollees must remember to enroll each year to continue participating in FSAFEDS. Enrollment does NOT carry forward year to year. 

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