Setting up a Flexible Spending Account
It’s easy to set up an account and arrange for automatic contributions to it.
Remember, the IRS has relaxed the “use it or lose it” rule. Instead of losing all unspent money in your Health Care FSA at the end of the plan year, you’re able to protect up to $500 by rolling it over to the following year. Note that rolling over funds does not impact your maximum election for the following plan year. Keep in mind that the rollover rule only applies to the Health Care FSA. Participants in the Dependent Care FSA cannot roll over any unused funds.
Enrollment and Changes
You can enroll in or make changes to a Flexible Spending Account during:
- Your new-employee eligibility period
- The annual open enrollment period
- After certain employment status changes or qualifying life events (such as a change in marital status or the arrival of a new child)
Use Penn’s secure Flexible Spending Account site to enroll and make changes (PennKey and password are required).
Estimating Your Expenses
You can’t withdraw money from a flexible spending account for anything except eligible reimbursements. Since you forfeit any money left in the account at the end of the plan year, it’s important to avoid overestimating your eligible expenses when you decide on the amount of your contribution.
For a Health Care Flexible Spending AccountReview the types of expenses that are eligible, and estimate the amounts you think you’ll pay out-of-pocket during the course of the plan year for:
- Health plan deductibles
- Health plan co-insurance (what you pay after your deductible has been covered)
- Health plan co-payments (what you pay when the service is provided)
- Health expenses that aren’t covered (such as orthodontia for adults)
- Health expenses over the amount your benefits plans pay for specific services