According to OPM, in 2022, less than 20% of federal workers employees across participating agencies have enrolled in the FSAFEDS program. Part of the hesitancy may be due to not fully understanding the advantages of a Healthcare FSA.
The Healthcare FSA Overview
A Health Care FSA is a pre-tax account that you can use to pay for eligible medical, dental, and vision care expenses that are not covered by your FEHB plan. Since you fund your account with pre-tax earnings to pay for qualified out-of-pocket healthcare expenses, you can lower your taxable income for each year in which you’re enrolled. The minimum election for all accounts is just $100 and the maximum contribution per person is established by the IRS each year. For example, the maximum for 2023 is expected to be around $3,050 per person.
“Keep in mind, if you want to continue with the FSAFEDS program, you need to re-enroll each year during Open Season.”
Who Is Eligible To Enroll In FSAFEDS?
If you’re eligible for the Federal Employees Health Benefits (FEHB) Program, and you’re an employee of the Executive Branch or another agency that participates in FSAFEDS, you are eligible to participate in a Health Care FSA (HCFSA) with FSAFEDS.
Keep in mind you need to be eligible for FEHB but you don’t need to be currently enrolled. You can enroll in a Health Care FSA during Open Season each year. Keep in mind, if you want to continue with the FSAFEDS program, you need to re-enroll each year during Open Season.
Healthcare FSA Eligible Expenses
In addition to using your Healthcare FSA to cover medical expenses, you can use it for other out-of-pocket expenses. For example, during the COVID pandemic, FSA participants could use their account to pay for face masks and hand sanitizer. Other eligible expenses include:
- Medical expenses: co-pays, co-insurance, and deductibles
- Dental exams, cleanings, X-rays, and braces
- Vision exams, contact lenses and supplies, eyeglasses, laser eye surgery
- Professional services: physical therapy, chiropractor, and acupuncture
- Prescription drugs, insulin, and prescribed over-the-counter medicine
- Over-the-counter health care items like aspirin, pain relievers, bandages, pregnancy test kits, blood pressure monitors, etc.
Consider The Advantages
Unlike your Thrift Savings Plan (TSP), you aren’t taxed on the money you use from your Healthcare FSA account to pay for eligible expenses. In fact, you can carry over up to $570.00 from one plan year to the next when you re-enroll during Open Season. For complete information on FSAFEDS plans, plus a complete list of eligible expenses, go to www.fsafeds.com.
