#Fsa eligible expenses 2021 code#

Under new IRS regulations, employees are now able to rollover up to $500 of their Health FSA funds from one plan year into the next. What happens to money left in the account at the end of the plan year?

If your spouse is participating in a Health Savings Account (HSA), participation in this FSA may disqualify them from further contributions to that HSA. What if my spouse has a Health Savings Account? The election changes must be consistent with the status change. Exceptions to the irrevocability rule are allowed mid-year with a qualified Status Change Event such as a marriage, divorce, birth, adoption, death, etc. Once you make your election during the enrollment period, it cannot be changed or cancelled during the plan year, it is irrevocable. You may also enroll mid-year if you are a newly hired employee, or if you have a qualified Status Change Event as outlined in the Summary Plan Description.Ĭan I make changes to my account mid-year? You may enroll in the plan during your employer’s open enrollment period prior to the start of the plan year. The IRS is concerned with the actual date of service, not the date of payment.Įligible Dependents - Coverage for a Medical FSA is extended to the employee, the employee’s spouse, and the employee’s child who is under age 26 or someone else who is a qualified tax dependent of the employee. Service Dates - In order to be eligible for reimbursement, services must be provided/incurred during the time that you are covered and active under the plan. Expenses aimed at maintaining general health or improving a person’s appearance (cosmetic procedures), are not considered eligible expenses. In order to qualify for reimbursement, the expense must diagnose, cure, mitigate, treat, or prevent disease, or affect a structure or function of the body.

#Fsa eligible expenses 2021 code#

Services - Eligible medical expense are defined by IRS Code §213(d) and must not be excluded by the plan documents. There are 3 things to consider as you determine whether an expense is eligible for reimbursement from your Medical FSA - services, service dates, and eligible dependents. Also, as the contributions are withheld from your paycheck pre-tax, it lowers your taxable income, meaning you pay less in taxes, and take more money home.

When you participate in the Flexible Spending program, your eligible expenses are paid for with tax-free money. What are the advantages to having an FSA? As you incur expenses, you will submit for reimbursement from your account, either with a paper claim ( Reimbursement Claim Form) or with the WEX debit card. That annual amount will be divided equally over your yearly pay schedule, and deductions will be made pre-tax from each pay check and deposited to that account. The Medical FSA covers not only medical expenses, but also dental and vision services.ĭuring the open enrollment period with your employer, you will make an election for the amount you want contributed to your FSA. What is a Flexible Spending Account (FSA)?įlexible Spending is an employer sponsored program that allows you to set aside money pre-tax to use for certain IRS eligible expenses. Flexible Spending Frequently Asked Questions