Flexible Spending Accounts
Save Taxes with a Flexible Spending Accounts.
The flexible spending account (FSA) lets you pay for certain expenses with tax-free money. When you choose to participate, you elect to have salary deducted from your paycheck, before it is taxed, and directed to your flexible spending account.
This money is then available to reimburse you tax free for eligible health care and dependent care services provided during the calendar year, depending on the FSA you elect. Health care and limited purpose FSAs may be continued through COBRA following a loss of coverage if the balance remaining in the account at the time of the loss (e.g., separation of employment) exceeds deductions taken from pay.
- Health Care FSA - Medical, prescription, vision, and dental services
- Limited Purpose FSA (LPFSA) - Vision and dental services (compatible with HSA)
- Dependent Care FSA (DCFSA) - (DCFSA) - Care for child under 13 or adult dependent incapable of self-care
- HSA Bank website
- High-level summary of eligible expenses
- HSA Bank Reimbursement Account Claim Form (for FSAs and HRAs)
- Tips for substantiating, or validating, your eligible expenses
- Differences between an HSA and an FSA (video)
FSA Frequently Asked Questions:
Do the FSA and its funds roll over year-to-year?
No. These are considered "use-it-or-lose-it" arrangements. Unused funds remaining in the FSA after the runout period will be forfeited.
Health care FSA, LPFSA runout: 90 days after the end of the plan year or after a loss of benefits eligibility (e.g., termination of employment)
DCFSA runout: 90 days after the end of the plan year.
When are my FSA funds available?
Health care FSA, LPFSA: Annual elected amount is available upfront (even though deductions happen incrementally).
DCFSA: Funds are available as they are deducted from each paycheck.
What is the FSA coverage period?
You are covered by the FSA (and therefore may incur eligible expenses for reimbursement) from the date the account opens (1/1 or the date you became eligible for benefits) until the end of the plan year (12/31) or until the date you lose benefits eligibility (e.g., termination of employment).
DCFSA exception: You may incur eligible expenses until the end of the plan year, even if you lose eligibility for Purdue benefits.
Can I make changes to my contributions mid-year?
Health care FSA, LPFSA: No.
DCFSA: Yes, with a certain qualifying life event. See the Dependent Care FSA page for more information.
What other accounts may I (or my spouse, if applicable) have with an FSA?
Health care FSA: HRA* or DCFSA
LPFSA: HSA, DCFSA
DCFSA: DCFSAs do not negatively impact any other type of account/arrangement. You may participate in an HSA, HRA, health care FSA or LPFSA at the same time you are covered by a DCFSA.
*You may not request reimbursement from both accounts for the same expense.
What happens to the FSA if I terminate my employment with Purdue?
You may incur eligible expenses until the termination of your arrangement (day after the last day of employment or benefits eligibility) and will have a 90-day runout period to file claims for reimbursement (your card will not work/pull funds from the FSA after you are terminated). Unused funds remaining in the account after the runout period will be forfeited.
DCFSA exception: You may still incur eligible expenses for reimbursement until the end of the plan year, even if the account terminates early.
On what and on whom can I spend the FSA funds?
|Account||Who can incur eligible expenses||What expenses are eligible|
|Health care FSA||You, your spouse, your child(ren) under 26||Medical, prescription, vision, dental|
|LPFSA||You, your spouse, your child(ren) under 26||Vision, dental only|
|DCFSA||Your child(ren) under 13, your adult dependents who are incapable of self-care||Dependent care only (e.g., day care, elder care|
As a rule, you cannot use the funds on anything that isn’t for the diagnosis, cure, mitigation, treatment, or prevention of disease (e.g., cosmetic surgery, alternative medicine, teeth whitening). The following are not eligible for reimbursement from the HRA:
- Amounts paid for health insurance premiums, including COBRA
- Amounts paid for long-term care coverage or expenses
- Amounts for eligible expenses already paid by an insurance plan
How can I access the money in the FSA?
HSA Bank will issue you a debit card when an account is opened (unless you already have a card from a previous account with them) which can be used at the point-of-sale just like any other debit card. Cards may only be swiped to pay for eligible expenses for the current plan year.
You may also request reimbursement of funds that were paid by other means by filing a claim and submitting supporting documentation online at www.hsabank.com, through the HSA Bank mobile app, or by fax or mail using the forms below.
- Reimbursement Claim Form (for all FSAs)
- Recurring DCFSA Claim Form
I used my HSA Bank card on an eligible expense and HSA Bank is asking me for documentation to prove it was eligible. Why?
The IRS requires account administrators to ensure that the FSA is only used for eligible healthcare expenses. In many cases, the purchase is automatically substantiated, or proven eligible, by the provider's merchant system. Sometimes, however, additional documentation is needed, such as in cases where the card is used at a hospital or dental office since those locations may also offer non-eligible services such as cosmetic surgery and teeth whitening. Here are tips for substantiating, or validating, your eligible expenses.
What happens if I have an expense higher than the FSA balance?
You may only spend or be reimbursed up to the FSA balance; however, with a DCFSA, if you submit a claim for more than the balance, the remaining amount will stay in a queue and will be reimbursed to you when additional funds are contributed to the DCFSA (e.g., with your next paycheck deduction).
How does my HSA Bank card work if I have a health care FSA and an HRA?
When you swipe your card, funds will first be pulled from the health care FSA. Once your FSA balance has been depleted, funds will then be pulled from the HRA.
What happens if I swipe my card to pay for an ineligible expense?
HSA Bank will reach out to ask for substantiating documentation. If you can't provide it, you will be asked to pay back the account. If neither of those two things take place, you will have to pay taxes on any amount used for ineligible expenses. Additionally, you may incur a 20 percent tax penalty. Consult a tax advisor for more details.
How do I order a replacement or additional HSA Bank debit card(s)?
To order a HSA Bank debit card, call HSA Bank directly at 1-800-357-6246 or log into the member portal at HSA Bank and select Manage My Debit Card(s). Note: Once you have been ordered a total of two cards (including the first you were sent automatically), there is a $6 fee per card afterwards.