Flexible Spending Accounts
The Flexible Spending Account (FSA), administered by HealthEquity | WageWorks,* provides you with a way to pay for eligible health care and / or dependent care expenses with pre-tax dollars.
In order to contribute to either a Health Care FSA and/or a Dependent Care FSA, you must enroll within 31 days of the date of hire. To continue the FSA in subsequent years, participants must actively enroll each year during the Annual Enrollment period.
A Health Care FSA pays for qualified health care expenses incurred by you and your eligible tax dependents that are not covered or reimbursed by your health insurance plan (e.g. copays, coinsurance, etc.). If you enroll in a 2021 FSA, only qualified expenses incurred between January 1, 2021 and December 31, 2021 will be eligible for reimbursement. Claims must be submitted to HealthEquity | WageWorks by March 31, 2022.
The maximum amount you can contribute to a Health Care FSA is $2,750.
A Dependent Care FSA may be used for eligible dependent care (day care, elder care) expenses incurred so that you may work. If you are married, your spouse must also work or go to school while you are at work to qualify for this plan.
Your dependent care expenses must be for the care of one or more qualified dependent(s) but not for dependent health care expenses. Qualified dependent(s) for a dependent care FSA may include:
- Your child(ren) under age 14**
- Dependents of any age who are mentally or physically incapable of caring for themselves, and whom you claim as a dependent on your federal income tax return
American Rescue Plan Act Dependent Care FSA Changes
For the 2021 plan year only, the American Rescue Plan Act allows the Dependent Care FSA limits for pre-tax contributions to increase to $10,500 (up from $5,000) for single taxpayers and married couples filing jointly, and to $5,250 (up from $2,500) for married individuals filing separately.
Beginning May 3, 2021, eligible employees may enter a new Dependent Care FSA election or change an existing election via the Benefits Resource Center.
Consolidated Appropriations Act FSA Changes
Health Care FSAs and Dependent Care FSAs are ordinarily subject to an IRS “use it or lose it” rule that requires unused DCFSA balances at the end of a plan year to be forfeited and permits a maximum of $550 unused HCFSA funds to be carried over into the following plan year.
The Consolidated Appropriations Act allows for all unused HCFSA and DCFSA funds from plan years 2020 and 2021 to automatically carry over to the following plan year.
Even if you did not re-enroll in a HCFSA or a DCFSA for 2021, you will still be able to use the funds remaining in your account from 2020. Carryover funds from 2020 will be posted to participant accounts on or about April 15, 2021.
|Health Care FSA||Dependent Care FSA*|
|How much you can contribute per year||Between $120 and $2,750||
Between $120 and $10,500
If you are a highly compensated employee, your contribution to the Dependent Care FSA will be limited to $2,600 in 2021 (see note).
|Examples of eligible expenses||
|Examples of non-eligible expenses||
*Notes on Dependent Care FSAs:
- Non-discrimination testing is performed every year and there has to be a certain ratio of contributions from non-highly compensated employee and highly compensated employees in order to pass. Based on past years' results, highly compensated employees must be limited to $2,600 in order to pass.
- You are classified as a highly compensated employee as defined by the IRS if your compensation is equal to or exceeds $130,000.
- You cannot use the Dependent Care FSA to reimburse for health care expenses incurred by a dependent.
- If you are married, IRS regulations may impact how much you can deposit:
- If your spouse has a Dependent Care FSA through his or her employer and you file a joint tax return your combined deposits cannot exceed $10,500.
- If you are married and file separate tax returns the most you can contribute is $5,000.
** Consolidated Appropriations Act Age Limit Increase: If you have a qualifying dependent who turned (or will turn) 13 during the 2020 or 2021 plan years, you may be able to use any unused funds from those plan years for qualifying expenses submitted for that child until they turn 14. To qualify for this relief, enrollment in the DCFSA prior to January 31, 2020 is required.
Reimbursement Options through WageWorks
If you enroll in a Health Care FSA, you will be issued a WageWorks debit card that may be used instead of cash or credit at health care providers and pharmacies for eligible services, goods, and prescriptions. Payment comes from your Health Care FSA; in most cases, you will not need to submit a claim or wait for reimbursement.
Through WageWorks’ “Pay My Provider” option, you may choose to have WageWorks pay a provider directly, or you may choose to submit a claim online through Wageworks’ “Pay Me Back” feature.
For more information regarding tools and resources available to manage your FSA, visit the WageWorks website.
Note about Health Care FSAs and HDHP with HSA Plans
Participants may enroll in either the Health Care FSA or the Health Savings Account (HSA); per Federal law, you may not enroll in both accounts in one plan year. Additionally, participants in the HDHP with HSA may not elect the Health Care FSA; the HSA is designed to reimburse you for all eligible, out-of-pocket health care expenses.
First make sure that you or your provider submits the expense to any benefit plan in which you are covered for the same services. As a new hire or first-time participant in the Health Care FSA, your account is set to reimburse you automatically for eligible expenses using WageWorks’ Automatic Health Plan Claim (AHPC) feature. You may use the AHPC feature as long as you do not activate your WageWorks debit card; activating the card will turn the auto-pay feature off.
Automatic Health Plan Claim (AHPC)
When you visit a health care provider such as a doctor or dentist and are enrolled in one of the NYU medical plans, the NYU Dental Plan, and/or the NYU Vision Plan, your insurance carrier provides the amount of the transaction not covered by the health plan to WageWorks. The amount not covered represents the "out-of-pocket" cost for which your FSA can be used. A payment will be made directly to you from your FSA as long as the claim is filed and processed by the claims administrator by March 31 of the following calendar-year deadline.
Use Your WageWorks Health Care Card
You may use your Card instead of cash or credit at health care providers and pharmacies for eligible services, goods, and prescriptions. You can also use the Card at general merchants and through stores that have an industry standard (IIAS) check-out system that can automatically verify if the item is eligible for purchase with your account. If WageWorks is unable to determine that your Card was used to pay for eligible health care products and services, you will be contacted with instructions on how to submit verification of the expense.