• Flexible Spending Accounts (FSA) FAQ

    Who is eligible to participate?

    Only employees are eligible to participate in the FSA. Therefore, two percent or more owners in an S Corporation, sole proprietors, partners in a partnership, LLCs, and LLPs are not eligible to participate in the plan. Your PacificSource Administrators representative will work with you to resolve any eligibility questions.

    Can employees make changes during the plan year?

    Changes to the dependent care account can be made if the participant experiences a qualified change in status (marriage, divorce, birth, death, adoption, a spouse changing employment, or a job shift change for the employee or their spouse that directly affects their child care). Changes to the unreimbursed health expense account are based on a more limited set of qualifying events, and can be made only if the plan you have adopted allows changes to this account.

    How soon must employees submit claims?

    Employees may submit requests for reimbursement at any time during the year, and have until 90 days after the plan year to make requests.

    What if employees want to change their deduction amount?

    With the healthcare FSA, the deduction amount may not be changed during the plan year unless your plan document allows for qualified changes. The deduction amount for dependent care may be changed during the plan year, but only if a qualified status change has occurred. To change their deduction, employees simply complete a change form and submit it to their human resources department.

    Can a participant be reimbursed before they have contributed the amount to the account?

    It depends on the type of account. With a dependent care account, the eligible reimbursement amount is available only after the funds have been payroll deducted and those funds have been received by PacificSource Administrators. For the unreimbursed health expense account, the reimbursement process will start after the plan year is established and we have received the first payroll reduction of the plan year. Participants have access to their total annual election at this time.

    What is the maximum allowable allocation for an FSA?

    It varies by the type of account. For a dependent care FSA, the maximum is $5,000 per calendar year, or $2,500 if married filing separately. With a healthcare spending account, the maximum annual election is $2,550 per calendar year. With a premium only plan, no such maximum applies as the premium is the only pre-tax deduction.

    Have another question about FSAs? Please contact us