If you are eligible for Federal Employees Health Benefits (FEHB), you are eligible to enroll in a flexible spending account (FSA) with FSAFEDS. It does not matter whether you are actually enrolled in FEHB—eligibility is the key. Participation in FSAFEDS is voluntary and you must elect to participate.
If you are on a temporary not-to-exceed appointment, you are eligible to enroll in FSAFEDS after you have completed 1 year of continuous employment.
Your FSAFEDS enrollment is effective only for one benefit period. You must reenroll in FSAFEDS for each year that you choose to participate. If you do not reenroll during the Benefits Open Season, you will not participate in the next benefit period, unless you experience a qualifying life event that allows you to make an election outside of the Benefits Open Season.
RI 70-1, Guide to Federal Benefits for Federal Civilian Employees gives an overview of the FSAFEDS program. Additional information is available on the FSAFEDS Web site.
The FSAFEDS benefit period is from January 1 of the current year through March 15 of the following year. Under Internal Revenue Service tax rules, you forfeit any money for which you did not incur an eligible expense under your FSA accounts during the Benefit period. This is known as the “use or lose” rule. Be sure to carefully plan how much money to contribute to your accounts. The FSAFEDS Calculator can help you calculate allotments based on your individual situation and can indicate your potential tax savings.
FSAFEDS offers three types of FSAs:
- Health Care Flexible Spending Account (HCFSA). The HCFSA is used to pay for qualified medical costs and health care expenses that are not paid by your FEHB plan or any other insurance. The minimum you may elect each year is $250 and the maximum is $5,000.
- Limited Expense Health Care Flexible Spending Account (LEX HCFSA). The LEX HCFSA is available only to employees who enroll in an FEHB High Deductible Health Plan (HDHP) with a Health Savings Account (HSA), or whose spouse is enrolled in a non-FEHB HDHP with an HSA. Eligible expenses are limited to dental and vision care services/products that meet the Internal Revenue Service definition of medical care. The minimum you may elect each year is $250 and the maximum is $5,000.
- Dependent Care Flexible Spending Account (DCFSA). The DCFSA is used to pay for expenses associated with eligible child care or adult dependent care for qualified dependents that is necessary to allow you or your spouse to work, look for work, or attend school full time. If you are an active employee, you are eligible to participate in a DCFSA. The only exception is intermittent or “when actually employed” employees who are expected to work less than 6 months in a calendar year. There is a $5,000 household limit ($2,500 if married, filing separately) on the amount that can be set aside in a DCFSA.