Below are our most frequently asked questions regarding Flexible Spending Accounts (FSA). If your question is not listed below, feel free to submit it via e-mail to askhr@wayne.edu.

• What are Flexible Spending Accounts?

  Flexible Spending Accounts (FSAs) are employer-sponsored plans authorized by the federal government that allow eligible employees to set aside money from their paycheck on a "pre-tax" basis to pay for health care and dependent care expenses for themselves, their spouse, and/or children and any other IRS-eligible dependent. WSU offers a Health Care FSA and a Dependent Care FSA.

• What is a Health Care FSA and why is it beneficial?

  The Health Care FSA benefit (referred to as "Medical FSA" by WEX) permits eligible employees to contribute pre-tax income to a Health Care FSA. The Health Care FSA will reimburse an employee on a pre-tax basis for their unreimbursed medical expenses.

  It is likely an employee will have some medical expenses that will not be covered by their health care insurance that they will have to pay for in the coming year. For example, an employee or their family may have medical expenses that are subject to deductibles and copayments under the Blue Cross Blue Shield medical insurance plan. Or, an employee may incur expenses that are not reimbursed at all, such as hearing aids or eyeglasses. Normally, an employee would pay for these expenses with after-tax income. Because taxes reduce the value of a dollar, an employee would have to earn considerably more than $100 to pay for $100 of expenses.

• How much can an employee contribute to their Health Care FSA?

  The minimum amount an employee may elect to defer to a Health Care FSA for 2024 is $130.

  The maximum amount you may elect to defer to a Health Care FSA for 2024 is $3,200.

  The maximum amount you may elect to defer to a Health Care FSA for 2025 is $3,300.

• How does an employee get reimbursed for Health Care Claims?

  FSA participants receive a debit-style Mastercard that allows direct access to FSA funds for eligible health and dependent care expenses. The employee's debit card will only work at provider locations that have the information inventory approval systems (IISA) installed. It is important to note that purchases made with their card on or after January 1 of the plan year will access funds from that plan year's FSA accounts. Because the card deducts funds directly from their FSA account to pay for services and supplies at the point of sale, it eliminates the need to file claims and wait for reimbursements. An employee must, upon request, submit receipts to WEX within 14 days of making their purchases.

  If an employee did not use their debit card, to initiate the reimbursement process by completing a claim form, an employee must attach their qualified receipts, and submit them to WEX. For those who elect to participate in a Health Care FSA, when submitting for uninsured or non-payable health care expenses, it is important that the employee provide WEX with the explanation of benefits from the insurance carrier and itemized receipts.

  Claim submissions should be sent to: WEX, P.O. Box 2926, Fargo, ND 58108

• What is a Dependent Care FSA and why is it beneficial?

  The Dependent Care FSA benefit permits eligible employees to contribute pre-tax income to a Dependent Care FSA. The Dependent Care FSA will reimburse the employee on a pre-tax basis for their eligible dependent care expenses.

  If an employee has dependents, they may have expenses for dependent care. For example, an employee may have dependent care expenses for baby-sitters, daycare, or the care of a parent. Normally, an employee would pay for these expenses with after-tax income.
  
  Since there is also an after-tax credit available to individuals filing federal income tax returns, an employee participating in a Dependent Care FSA must be weighed against the after-tax credit for which they may be eligible to receive.

• How much can an employee contribute to their Dependent Care FSA?

  The minimum amount an employee may elect to defer to a Dependent Care FSA for 2024 is $208. The maximum is dependent on an employee's tax filing status:

  • If an employee is married and file a joint return, the maximum is the lesser of:
    • their earned income,
    • the earned income of their spouse or
    • $5,000.
  • If an employee is married and file a separate tax return, the maximum is the lesser of:
    • $2,500 or
    • their earned income.
  • If an employee is single and file head of household, the maximum is the lesser of:
    • $5,000 or
    • their earned income.

  If the employee's spouse participates in a Dependent Care FSA through another employer and the WSU employee file a joint return, the total amount both of individuals contribute cannot exceed $5,000. The employee is responsible for coordinating their contributions to a Dependent Care FSA with their spouse so the $5,000 limit is not exceeded. Verification that their spouse's income exceeds $5,000 is required to enroll in a Dependent Care FSA.

• How does the Dependent Care FSA benefit work?

  In order to get reimbursed for Dependent Care expenses the expenditures must be incurred and paid (not billed, or prepaid) during the applicable coverage period. Only dependent care expenses may be reimbursed from a Dependent Care FSA. Claims must be properly substantiated prior to reimbursement. The definition of a dependent for a Dependent Care FSA is any person who either:

  • may be claimed as a dependent on the employee's tax return and who is under age 13,
  • may be claimed as a dependent on the employee's tax return and who requires full-time care because of physical or mental incapacity, or
  • is their spouse, who is physically or mentally incapable of caring for himself or herself.

  Proof of the dependent's age and tax status must be available for verification purposes if required. Proof of the dependent care provider's tax identification number or social security number is also required before a claim will be processed.

• How does an employee get reimbursed for Dependent Care Claims?

  For those who elect to participate in a Dependent Care FSA, to receive reimbursement, you must submit a completed claim form, the itemized bill for the dependent care, and other information WEX requires including the dependent care provider's tax identification number or Social Security Number. When the claim is approved, you will be reimbursed up to the full amount of your eligible expense, not to exceed the amount accumulated in your Dependent Care FSA. Claims take approximately three weeks to process. You may submit claims anytime during the year.

  Claim submissions should be sent to: WEX, P.O. Box 2926, Fargo, ND 58108

• Can an employee change their election during the plan year?

  Generally, an employee may not change or vary their elections during the plan year. The plan year is January 1 through December 31 of each year. There are exceptions to this general rule: an employee may change or revoke their election at any time during the plan year within 30 days of a Qualifying Life Event such as divorce, marriage or birth, etc. as defined by Section 125 of the IRC and permitted by the plan.

• Can an employee transfer money from one account to another?

  No, an employee cannot transfer money between a Health Care FSA and Dependent Care FSA, nor use funds from one account to pay for expenses that apply to the other account.

• What if an employee doesn't spend all of the accrued money in the FSA account(s)?

  This is a "use it or lose it" program and IRS regulations require that any balance remaining at the end of the plan year be forfeited. However, the IRS allows a grace period through March 15 of the following year during which an employee may continue to incur expenses and obtain reimbursement from their previous year's FSA balance. An employee may file claims for expenses incurred during a plan year and the grace period which is generally through April 30 of the following year. It is important that an employee make their FSA elections carefully to avoid forfeiture.

• What are important deadlines that an employee must follow if they are going to participate in a FSA?
  • Payroll Contribution Period:  January 1 December 31, a 12-month period to make pre-tax payroll contributions and annual election to the program is required
  • Health Care FSA Incurred Expense Period: January 1 March 15, a 14-1/2 month claim period to incur expenses (excludes Dependent Care FSA)
  • Reimbursement Period: January 1 April 30, a 16-month period to request payment for eligible expenses. All reimbursement requests for the plan year ending at the end of the incurred expense period (ending March 15) must be received by April 30 in the HR Service Center. Requests received after this date will not be processed and any remaining funds in the employee's account will be forfeited.
• How does the extended incurred expense period work?

  Claims with dates of service between January 1 and December 31 will be paid using available FSA funds for that plan year. 

  • Health Care FSA claims with dates of service between January 1 and March 15 of the following calendar year:
    • If the claim is incurred in this time period, any remaining current plan year FSA funds will be applied to the claim. Once the current plan year funds are exhausted, then the claim will be applied to next plan year funds.
    • The employee will not have to request that current plan year funds be used. If there is a remaining balance and the claim is incurred January 1 March 15, then the current balance will be used first.
  • Health Care FSA claims with dates of service after March 15 will be reimbursed from the next plan year FSA funds, if an employee elects re-enrolled during the open enrollment period.
• What happens if an employee terminate their employment?

  If an employee's coverage ends prior to the end of the plan Year, they will have 120 days after the date coverage ends to submit claims for reimbursement from the Plan. Only expenses incurred during the plan year and prior to the date their employment ends are eligible. Claims documentation must be received by WEX no later than 120 days after their last date of employment with WSU to be eligible for reimbursement from the plan. However, with the Health Care FSA benefit, the employee may be eligible for continuation coverage under COBRA. Please contact the WSU COBRA administrator for more info. Since this is a "use it or lose it" program, any unused funds will be forfeited.

Back to Flexible Spending Accounts page