Health Care Flexible Spending Account (FSA)
NOTE: 2021 Accounts may be impacted by current COVID-19-related legislation. See the HR COVID-19 Benefit Vendor Updates (or Announcements) page under "HSA/FSA/HRA" for more information.
A health care Flexible Spending Account (FSA) is an employer-owned and funded account to which an employee may contribute pre-tax funds that may be used tax-free for eligible medical, prescription, over-the-counter, vision, and dental expenses incurred by the employee and their eligible dependents (e.g., spouse, child under age 26) during their FSA coverage period.
FSA funds do not roll over from year to year — any unused funds remaining in the account following the end of the runout period (90 days following the termination of the account - usually 3/31) are forfeited. The FSA coverage period, or the time in which the employee may incur eligible expenses, begins with the opening date of the FSA and ends when the FSA ends (typically 12/31). If the accountholder loses benefits eligibility or leaves Purdue employment midyear, their FSA would terminate with that date and they would have 90 days after to file claims for reimbursement of expenses incurred up until that date.
All benefits-eligible employees (including those who opt out of a Purdue medical plan) may enroll in a health care FSA so long as they are not participating in (i.e., receiving contributions to) a Health Savings Account (HSA). You may participate in a Health Reimbursement Arrangement (HRA) while you have a heath care FSA, but you may not request reimbursement from both plans for the same eligible expense. You may also elect a Dependent Care FSA (DCFSA) with no impact to your health care FSA.
Spouse tip: If you have a spouse who is participating in (i.e., receiving contributions to) an HSA, your enrollment in a health care FSA will negatively impact their HSA eligibility. The IRS has rules against spouses being covered by these plans at the same time.
Purdue employees may contribute up to the IRS maximum of $2,850 for the calendar year to a health care FSA.
This election cannot be changed outside of open enrollment. The annual amount you choose to contribute is available to you on a debit card up front on January 1 and is taken in equal installments from your regularly-scheduled pays on a pre-tax basis. If you are paid on an academic year (AY) schedule, your FSA deductions will be taken only from your September through April pays. You will not have an FSA deduction taken from any summer earnings you may have.
Note: The maximum amount you may contribute to a healthcare FSA at Purdue when making open enrollment elections is typically a year behind the IRS limits as new limits tend to be announced after the annual open period.
Accessing your funds
You have multiple ways in which you can access your health care FSA funds — by swiping your HSA Bank debit card, by filing a claim to request reimbursement for an eligible expense paid out of pocket, and by submitting payment to your provider.
HSA Bank Debit Card
Some purchases made by HSA Bank debit card may be auto-substantiated if the provider or merchant uses an inventory information approval system (IIAS) which identifies eligible expenses (most commonly, pharmacies). When a charge is not auto-substantiated, HSA Bank will reach out for documentation.
Cards are linked to the current year's FSA balance and may only be swiped to pay for eligible expenses for the current plan year. See "HSA Bank Debit Card" on the HSA, HRA and FSA page for information and to learn how your card works when you have multiple HSA Bank accounts.
File a Claim
You may file a claim for an eligible expense paid out of pocket at www.hsabank.com or through the HSA Bank mobile app with yourself as the Payee. Log in, click or tap "File a Claim," select your health care FSA, then follow the prompts to submit supporting documentation and enter the claim details. Funds will be reimbursed via direct deposit (if you have enrolled in it with HSA Bank) or check.
(FSA/HRA) HSA Bank Reimbursement Account Claim Form (If you have more than one account, funds will be pulled based on account stacking order)
The IRS requires plan administrators to validate that your health care FSA funds are used only for eligible health care expenses; therefore, each of the above options requires substantiation or validation of the eligibility of the expense by means of supporting data or documentation. If HSA Bank requests documentation from you, you will have 45 days to provide it. If documentation is not provided, the amount of your unsubstantiated charge(s) will be reported back to you as taxable income the following year, in keeping with instructions from the IRS.
For more information on substantiation, read Tips for substantiating, or validating, your eligible expenses.
Verifying medical necessity
Expenses must be medically necessary to qualify for reimbursement. Some health care services and products (e.g., massage therapy and weight loss programs) may be for both medical and non-medical reasons; therefore, HSA Bank may request that your doctor confirm that the expense is a recommended treatment and is a direct result of a specific, diagnosed medical condition.
If HSA Bank requests confirmation, your doctor may complete a letter of medical necessity which you can submit to them.