What You Need to Know
Flexible Spending Accounts (FSAs) allow you to set aside pretax dollars that you can use to pay for eligible health and dependent care expenses. All contributions are deducted from your paychecks before taxes, helping to reduce your taxable income.
Use It or Lose It
Plan carefully — the IRS requires you to forfeit any money remaining in your FSA at the end of the plan year. You have until March 31 of the following calendar year to submit claims for eligible expenses incurred during the previous year. Unless you have a qualified life event, you cannot change your allocation amounts during the year.
How to Use the FSAs
You can enroll in an FSA and select your contribution as a new hire, every year during Open Enrollment or when you have a qualifying life event. You must re-enroll each year you want to have an FSA, per IRS rules.
Note: If you enroll in a CDHP and HSA, or your spouse is contributing to an HSA, you are not eligible to participate in the Health Care FSA. You may enroll in the Limited Purpose FSA.
When you incur an eligible expense, you can use your FSA debit card or pay out of pocket and submit a reimbursement request with documentation.
All expenses for the FSAs must be incurred during the plan year: January 1 through December 31.
You have until March 31 of the following year (e.g., March 31, 2024, for claims incurred in 2023) to submit a claim for reimbursement. Any funds in the account after this date will be forfeited.
Learn more about FSAs in the 2023 Benefits Guide.
Health Care FSA
The Health Care FSA (HCFSA) is available to you if you enroll in a traditional medical plan and neither you nor your spouse is contributing to a Health Savings Account (HSA). With the Health Care FSA, you can contribute up to $3,050 pretax and use the money toward out-of-pocket healthcare expenses for you and your eligible family members. It’s easy to set aside money through payroll deductions, and easy to pay, too — just use your convenient FSA debit card at the time of service, or pay out of pocket and submit for reimbursement later.
Eligible Health Care Expenses
Use the HCFSA to pay for eligible out-of-pocket expenses for yourself and anyone you claim on your tax return as a dependent — even if they’re not enrolled in a Hitachi Vantara medical plan.
Eligible expenses must be:
- Tax deductible, according to the IRS
- Medically necessary and not covered by your medical, dental or vision plans.
- Examples include:
- Medical expenses, such as copays
- Your share of covered expenses
- Dental and orthodontia expenses
- Prescription glasses, contact lenses and cleaning solution
- Laser vision correction
- Alcoholism or drug addiction programs
- Prescription drugs and drug copayments
- Over-the-counter medications with a prescription from your doctor
Limited Purpose FSA
The Limited Purpose FSA is available to you if you enroll in a CDHP medical plan and HSA. With the Limited Purpose FSA, you can contribute up to $3,050 and use the money for eligible dental and vision care expenses that are not covered by your dental or vision plans or HSA, such as deductibles, coinsurance, copays and orthodontia.
Dependent Care FSA
You may contribute up to $2,500 to a Dependent Care FSA if you’re married and filing a separate income tax return or up to $5,000 if single or married and filing a joint income tax return. Use your pretax contributions to pay day care expenses for children age 13 and younger or for elder dependents unable to care for themselves.
Eligible expenses are for care that’s necessary for you and your spouse to remain employed or attend school full time. Care may be provided through live-in care, babysitters or licensed day care centers.
Unlike the Health Care FSA, you can be reimbursed only up to the amount available in your account after your payroll contributions.
Note: Some expenses that are eligible for your Dependent Care FSA may also be eligible for a credit on your federal tax return. Keep in mind that you cannot claim the same expenses for the Dependent Care FSA and the tax credit. Talk with your personal tax adviser to determine which alternative is best for you.
Flexible Spending Accounts