Health Care Flexible Spending Account
Eligible Health Care Expenses
Generally, a health care spending account can be used to pay for health care expenses for yourself, your spouse or your eligible dependents if:
- The expense would be deductible by you on your federal income tax return if you paid the expense directly, and
- The expense is not paid by any other health plan or from some other source.
Despite the general rule stated above:
- An eligible expense does not include expenses for qualified long term care coverage or premiums paid for group or individual health plan coverage.
- Over-the-counter medications without a doctor's prescription are not be reimbursable. Over-the-counter medication may be reimbursed by submitting a doctor's prescription along with a receipt to WageWorks.
The IRS determines which expenses are eligible for reimbursement. You can search for eligible expenses on the WageWorks website.
Using Your Account
There are several ways to access your Minneflex health care account:
- Your WageWorks Health Care Card can be used only for your HRA/VEBA and Health Care FSA accounts (not dependent care) and only for eligible expenses incurred in the current year. Use the debit card for prescriptions, payments to doctors or dentists, eyeglasses, and other eligible health care expenses. There will be instances when you will need to provide proof of purchase, so keep your receipts.
- Pay Me Back is an option for HRA/VEBA, Health Care FSA, and Dependent Care FSA. In this option, you pay for the expense with your own funds and then request reimbursement from your FSA or HRA/VEBA. Access this option on your online account at www.wageworks.com.
- Pay My Provider is an option you can use for HRA/VEBA, Health Care FSA, and Dependent Care FSA. Payment is sent directly to your provider from your online WageWorks account. Access this option on your online account at www.wageworks.com.
Health Care FSA Carryover
Beginning with the 2016 plan year, any unspent funds greater than $25 but less than or equal to $500 that remain in your health care FSA at the end of 2016 will be carried over to the 2017 plan year. This carryover feature does not apply to the dependent care FSA. In addition, your entire 2015 health care FSA contribution is still subject to the "use it or lose it" rule.
Carryover Frequently Asked Questions
Do carryover funds affect the health care FSA contribution maximums? No. Carryover funds are in addition to the annual limit on the health care FSA contributions (currently $2,550).
When will the remaining prior plan year funds carryover into the new plan year? Carryover funds will be available on the first day of the new plan year. However, the amount of the carryover will not be determined until the end of the run-out period for the previous plan year.
During the run-out period, which account will be used first – the 2017 account or the carryover amount from the 2016 account? The 2017 (current) account will pay first and the 2016 (carryover) account will pay second. After the run-out period, any amount between $25 and $500 remaining in the 2016 will be added to the 2017 account balance.
Does an employee need to elect an FSA for the following plan year to have the FSA funds carryover? No.
Why aren’t amounts less than $25 eligible for carryover? The administrative fees and managerial tasks associated with accounts less than $25 would exceed the value provided to an employee for that account.
Is the carryover option available for the dependent care FSA? No, the carryover option is for the health care FSA only.
Health Care FSA Carryover Example
- For 2016, John elects to contribute $1,000 to his health care FSA. As of 12/31/2016, his 2016 plan year balance is $400.
- For 2017, John also elects to contribute $1,000 to his health care FSA.
- On 3/31/2017, John submits a claim with a date of service of 2/1/17 for $200. This claim will be paid out of the 2017 health care FSA funds and will leave a balance of $800 in the 2017 health care FSA.
- On 4/15/17 (the end of the run-out period for 2016 FSA claims), $400 will carryover from the 2016 health care FSA and will be added to his 2017 balance of $800 for a total of $1,200.
Last updated Feb 26, 2016