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Flexible spending account (FSA) FAQs


Learn more about eligible health care expenses, claim filing documentation and FSA reimbursement.


FSA frequently asked questions

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  • A health care FSA allows you to have pre-tax dollars withheld from your paycheck to pay for eligible health care or dependent care expenses. It covers not just your medical expenses, but also the expenses of your spouse and tax dependents.

    Your health care FSA funds are available as soon as they appear in your account. It’s important to understand that in most cases FSAs have a “use it or lose it” rule. That means you lose any money left in your account at the end of the plan year.

  • As with most health plans, you’re likely to have out-of-pocket expenses each year. If you have children and have to pay for childcare, a dependent care account can help stretch your hard-earned dollars. There are two types of flexible spending accounts:

    A health care FSA and limited-purpose FSAs can cover medical, prescriptions, hearing, dental or vision expenses that you would otherwise pay for out of pocket. Common qualified expenses that an FSA will usually cover include the deductible, coinsurance or copayment amounts for your health plan, eyeglasses or contact lenses, dental work and orthodontia, medical equipment, hearing aids and chiropractic care. Many over-the-counter drugs, such as cold and allergy medicines, and pain relievers and antacids, can also be reimbursed through an FSA with a doctor’s note/letter of medical necessity. Your employer may limit what expenses your plan reimburses, so please contact your Human Resources office for more information. For a list of eligible expenses please, see the IRS Publication 502. Another great feature is that the funds are front loaded to the account and are available at the start of your plan year.

    A dependent care FSA — also known as a dependent care assistance program (DCAP) — covers employment-related expenses for child care. Qualified expenses must be for services that allow for you to be able to go to work. Typical expenses under this account include charges for day care, nursery school and elder care (though not if it is for medical care) for your legal tax dependents. The dependent care FSA is not front loaded.

    • Your contributions are pre-tax or tax-deductible.*
    • Tax-free withdrawals are made to pay your out-of-pocket expenses related to health care and dependent care.
    • Because of these tax advantages, the more you use your FSA, the more money you could save. The amount of savings will depend on your personal tax rate.

    *Contributions are tax-deductible on your federal tax return. Some states do not recognize FSA contributions as a deduction. Consult a qualified tax adviser for advice.

  • Funding. You will contribute a pre-determined amount to your account. Your funds will be available for use on the first day of your plan year.

    Accessing funds. When you have eligible health care expenses, pay for them with your payment card, or pay out of pocket and request reimbursement online. Remember to always keep your receipts.

    Requesting reimbursement/substantiating purchases. It’s quick and easy to request reimbursement for eligible expenses paid using personal funds or to submit documentation for card purchases. Our documentation upload features online and on the mobile app will save you time and make your life easier.

    Please remember that credit card receipts, non-itemized cash register receipts and cancelled checks are not acceptable forms of documentation. Always request an itemized receipt or EOB from your health care provider or merchant.

    Claims processing. We will promptly process your request and reimburse you either by check or direct deposit if you sign up for that feature.

    Account management. Log in to your online account or the mobile app to check your account balance, set up your family profile, add a bank account to enable faster reimbursements or request a debit card in a dependent’s name.

  • Beginning January 1, 2022, Health FSA contributions are limited by the IRS to $2,850 each year. (This is a $100 increase from 2021 limit of $2,750.) The limit is per person; each spouse in the household may contribute up to the limit. Your employer may elect a lower contribution limit. Please see your plan documents or check with your Human Resources office for the specifics of your FSA Health Care Plan. The limit may be adjusted annually to account for inflation increases.

    For Dependent Care FSAs, you may contribute up to $5,000 per year if you are married and filing a joint return, or if you are a single parent. If you are married and filing separately, you may contribute up to $2,500 per year per parent.

  • Use our qualified medical expense tool to view eligible medial FSA expenses. They can also be found in IRS Publication 502. Due to frequent updates to the regulations governing FSAs and HSAs, this list does not guarantee reimbursement but, instead, is to be utilized as a guide for the submission of claims.

  • Certain qualifying events allow employees to increase/decrease their election or begin/cease participation in a plan. Common qualifying events can be found on the FSA status change form and include marriage, divorce, birth, death or a change in the cost of dependent care.

    The adjustment to the election must be consistent with the event. For example, an increase in the cost of daycare would not allow you to decrease your election (although if the increase made the cost of care unaffordable, one could justify no longer participating in the plan).

    Please refer to your employer’s plan document for further guidance on qualifying status change events applicable to your plan.

  • You are eligible for this benefit if you have a dependent (whose expenses are eligible) who requires care to enable you to work. In addition, you must meet one of the following eligibility criteria:

    • You are unmarried.
    • Your spouse works, is a full-time student, is actively seeking work or is disabled (incapable of self-care).
    • You are divorced or legally separated and have custody of your child even though your former spouse may claim the child for income tax purposes. Your dependent care FSA can be used to pay for childcare services provided the period the child resides with you.
  • Optum payment cards can be used at health care-related merchants, such as hospitals and vision, dental and doctor’s offices. It can also be used at drugstores, pharmacies and grocery stores that have implemented the IIAS (Inventory Information Approval System) or certified 90% of their gross sales are FSA-eligible. 

    As always, save itemized receipts, bills or statements any time the payment card is utilized.

    The payment card may also be used at daycare providers that accept Mastercard® or Visa® and have a valid merchant category code signifying they are a daycare provider. The payment card may not be used if you pre-pay daycare expenses, since the IRS requires the expense must be incurred before reimbursement can be made from your dependent care spending account.

  • The “run-out” is a specified period of time after the end of the plan year, or following your termination in the plan, in which you may continue to submit claims incurred during your period of coverage. This is not a period when you are able to continue to incur new expenses, but rather it allows you time to gather and submit expenses before your funds are forfeited. For example, if your plan has a 90-day run-out period, you will have 90 days from your date of termination to submit expenses incurred prior to the termination date.

  • A service or expense must be incurred before it is eligible for reimbursement. An FSA expense is considered “incurred” when the service is performed, not when you pay for the service. In addition, the service must be performed during your participation in the plan. Services or expenses incurred before or after your plan participation dates do not qualify for reimbursement.

  • To access your account online, please sign in

  • Due to HIPAA regulations, Optum cannot disclose your personal health information (PHI) to any unauthorized representatives.

    To authorize an individual or entity to discuss your account detail, complete the authorized release form.

  • Generally speaking, money remaining in your FSA at the end of the plan year will be forfeited. This is commonly known as the “use-it-or-lose-it” rule. However, some plans may allow you to continue submitting claims beyond the end of the plan period for any eligible expenses you incurred before the deadline. Additionally, some plans may allow you to continue spending your FSA dollars through a defined grace period or allow you to carry over a portion of your remaining balance. Be sure to check your specific plan rules in your summary plan description (SPD) by contacting your HR Department or requesting additional details from Optum Consumer Services.


Self-directed mutual fund investment options are made available through the services of an independent investment advisor, or your plan sponsor. Discretionary advisory services are provided by Betterment LLC, an SEC-registered investment adviser, with associated brokerage transactions provided by Betterment Securities, Member FINRA/SIPC. For details and disclosures visit betterment.com. The Schwab Health Savings Brokerage Account is offered to certain account holders through Charles Schwab & Co., Inc., Member FINRA/SIPC. For details and disclosures, visit schwab.com. Brokerage services are offered to certain accountholders through TD Ameritrade, Inc., Member FDIC/SIPC and a subsidiary of The Charles Schwab Corporation. For details and disclosures, visit tdameritrade.com.

Orders are accepted to effect transactions in securities only as an accommodation to HSA owners. Optum Financial and its subsidiaries are not broker-dealer or registered investment advisors and do not provide investment advice or research concerning securities, make recommendations concerning securities, or otherwise solicit securities transactions.

Health savings accounts (HSAs) are individual accounts offered through Optum Bank®, Member FDIC, or ConnectYourCare, LLC, an IRS-Designated Non-Bank Custodian of HSAs, each a subsidiary of Optum Financial, Inc. Neither Optum Financial, Inc. nor ConnectYourCare, LLC is a bank or an FDIC insured institution. HSAs are subject to eligibility requirements and restrictions on deposits and withdrawals to avoid IRS penalties. State taxes may apply. Fees may reduce earnings on account.

Flexible spending accounts (FSAs), dependent care assistance programs (DCAPs), health reimbursement arrangements (HRAs), Commuter and Parking Benefits, Tuition Assistance Plans, Adoption Assistance Plans, Surrogacy Assistance Plans, Wellness Benefits, and Lifestyle Accounts (collectively, “Employer-Sponsored Plans”) are administered on behalf of your plan sponsor by Optum Financial, Inc. or ConnectYourCare, LLC (collectively, "Optum Financial") and are subject to eligibility and restrictions. Employer-Sponsored Plans are not individually owned and amounts available under the Employer-Sponsored Plan are not FDIC insured. This communication is not intended as legal or tax advice. Federal and state laws and regulations are subject to change. Please contact a legal or tax professional for advice on eligibility, tax treatment, and restrictions. Please contact your plan administrator with questions about enrollment or plan restrictions.

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Your employer sponsored plan may exclude reimbursement for certain categories of items. Check your plan document and summary plan description or contact your benefits department for specific coverage details. 

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