Before deciding your health FSA annual election (the total amount you want to put into your account), it’s a good idea to think about your expenses for the upcoming year. Assess how much you have spent this year on out-of-pocket health care expenses. How much do you plan to spend next year? Use our online FSA savings calculator to estimate your upcoming health FSA eligible expenses.
Careful planning will save you money in the long run. You cannot change your election amount after your open enrollment period ends. That is unless you have a change in status event and your plan allows the change.
It’s also important to know which plan features your health FSA has. You can find answers to the questions below by reading your employer’s Summary Plan Description (SPD).
If your plan includes a carryover feature, you may only carry over the maximum amount allowed by your plan. The IRS “use-it-or-lose-it” rule still applies. After the plan year ends, you will forfeit any money left in your account that’s over the maximum limit.
If your health FSA plan doesn’t include a carryover feature, IRS rules require you to use your FSA dollars within the plan year, or if applicable, the run-out period. If you don’t use all of your FSA funds, they don’t carry over to the following year and can’t be returned to you. Funds that remain in your account will be forfeited after the plan year ends.
Signing up for a health FSA is simple. You’re just three steps away from being enrolled in a health FSA.