Health Care Flexible Spending Account (FSA)
Made possible by Section 125 of the Internal Revenue Code and subject to IRS regulations, and offered at USC through HealthEquity, health care FSAs can protect up to $2,850 a year per employee from any federal and state taxes.
- If you’re looking for information on dependent care FSAs, visit that webpage
- If you’re a Verdugo Hills employee, your Flexible Spending Account is administered by a different third-party provider – visit that webpage
- You choose an amount – up to $2,850 a year, minimum $100 – for health care expenses you think you will incur (details on what expenses qualify below).
- Calculate expenses carefully – you can only carry over $570 from your health care account to the next year (and those funds are not available until April 15 of the next year). Any unused amount above $570 in your health care account will be forfeited.
- The amount you select is then deducted from your paycheck in equal increments over the full 12-month calendar year (except for faculty who opt to receive their base pay over a shorter cycle).
- Enrollment is via Workday; enroll for your FSA within 30 days of hire date and every year thereafter during open enrollment (you must re-enroll each year), or when you have a life event status change.
- If you begin an account mid-year due to enrollment as a new hire or a status change, eligible claims must be for services rendered after the effective enrollment date.
- Because the amount you set aside in your FSA is not taxed for Social Security purposes, your future benefit from Social Security may be reduced slightly.
Health Care FSA accounts are for expenses incurred by you or your eligible dependents (as defined by the IRS) and include:
- Medical and dental plan deductibles
- Certain over-the-counter medicines if prescribed
- Other health care expenses not covered by your insurance (most expenses that the IRS considers tax deductible are eligible, but not all)
- Medical and dental insurance premiums
- Expenses associated with cosmetic surgery
- Expenses incurred for ineligible dependents or others not in your family
The Department of Labor (DOL) has clarified that employers are to extend deadlines around Flexible Spending Account (FSA) plans since the COVID-19 “Outbreak Period” is still ongoing.
Your Health Care FSA is subject to this extension and will allow unlimited carryover of your 2021 funds.
All unused funds from 2021 will carry over, and you now have until Dec. 31, 2022 (or until your fund amount is depleted) to submit claims.
You will see this reflected in your online account as follows:
- Your remaining 2021 balance will appear in your 2022 plan year account until the end of the Outbreak Period (the run-out date is Dec. 31, 2022 and subject to change by DOL).
- Your 2022 balance will appear in your 2022 plan year account.
- You can access both accounts using the same login.
- Claims will be paid as follows:
- If you re-enrolled for 2022:
- For 2022 dates of service, 2022 funds will be used first. Once 2022 funds have been spent, 2021 funds will be used.
- For 2022 dates of service, claims should be submitted using "Pay Me Back" or "Pay My Provider."
- 15 days after the run-out period ends (Dec. 31, 2022), any remaining 2021 funds will be moved to your 2022 account and can only be used for 2022 dates of service.
- If you did not re-enroll in 2022:
- You can still use your 2021 balance for 2022 dates of service. You will see a $0 2021 election amount reflected in your account.
- If you re-enrolled for 2022:
The chart below shows the information in a more condensed manner:
|Plan||Plan Start Date||Plan End Date||Original Carryover Amount||Original Run-Out Date (Deadline to submit claims)||New Run-Out Date (Deadline to submit claims)||Expected Date of Carryover Transfer|
|2021 HCFSA||1/1/2021||12/31/2021||$550||3/31/2022||3/31/2023 (DOL subject to change). WageWorks system will show 12/31/2022 as a place holder date until 2023.||December 2022 (subject to change)|
- Use HealthEquity's online “Pay My Provider” system
- Use the HealthEquity debit card; be sure to keep your receipts
- Use HealthEquity’s online “Pay Me Back” system
- Pay with personal funds and provide receipts for traditional claims reimbursement
- Purchase eligible products and services through the FSA Store
- Submit a claim by fax/mail, online or via the mobile app
Refer to the HealthEquity website for more information.