Flexible Spending Account Program for the Federal Government (FSAFEDS)
Program Description
A Flexible Spending Account (FSA) is a tax-favored program offered by employers that allows their employees to pay for eligible out-of-pocket health care and dependent care expenses with pre-tax dollars. By using pre-tax dollars to pay for eligible health care and dependent care expenses, an FSA gives you an immediate discount on these expenses that equals the taxes you would otherwise pay on that money.There are three types of FSAs:
The Health Care Flexible Spending Account (HCFSA) can be used to pay for qualified medical costs and health care expenses that are not paid by your Federal Employees Health Benefits (FEHB) plan or any other insurance. PLEASE NOTE: A HCFSA cannot be used to pay for any type of insurance premiums, including long-term care insurance premiums.
The Limited Expense Health Care Flexible Spending Account (LEX HCFSA) is only available to employees who enroll in a Federal Employees Health Benefits (FEHB) Program under a High Deductible Health Plan (HDHP) with a Health Savings Account (HSA). Eligible expenses are limited to dental and vision care services/products that meet the IRS definition of medical care. By using a LEX HCFSA, you can preserve the funds in your Health Savings Account to use/save for other purposes.
The Dependent Care Flexible Spending Account (DCFSA) can be used to pay for eligible dependent care expenses such as child care for children under age 13 or children who are physically or mentally incapable of self-care and, in some cases, elder care, so that you (and your spouse, if you are married) can work, look for work, or attend school full-time. You (or your spouse if married) must have earned income during the year to use a Dependent Care FSA (DCFSA).
General Program Requirements
You must be an active employee of the Executive Branch or of another agency that participates in FSAFEDS. You must also be eligible to participate in a health care FSA with FSAFEDS. You need only be eligible to participate in FEHB ? you do not need to be currently enrolled. The FSAFEDS HCFSA and LEX HCFSA limit per Federal employee is $2,500 ($5,000 for a "Federal couple").Additionally, if you are an active employee of the Executive Branch or of another agency that participates in FSAFEDS, you are eligible to participate in a DCFSA with FSAFEDS.
Under the IRS Code, annuitants (other than re-employed annuitants whose employment status is full-time) cannot participate in an FSA because an annuity is not considered salary.
