Flexible Spending Accounts (FSA)

Overview

An FSA allows you to set aside a portion of earnings on a pre-tax basis to pay for qualified medical expenses (medical, prescription, dental and vision expenses) incurred during the plan year. The IRS sets pre-tax contribution limits for FSAs and enforces rules related to plan administration, enrollment, and status changes. The State's FSA program is administered by ASIFlex.  Read the FSA FAQ and review below for information about how FSAs work.

Key limits for 2024:

  • FSA contribution limit for 2024: $3,200
  • Carryover limit for unused FSA funds at the end of 2024: $640

If you're looking for information on dependent care spending accounts (DCSAs), please visit the DCSA webpage.

Key Things to Remember

  • FSAs produce valuable tax savings.  With an FSA, you save money on taxes by setting aside pre-tax income for eligible expenses.  Watch this video from ASIFlex and use ASIFlex’s tax savings calculator to see how you can increase your take-home pay by contributing to an FSA.
  • FSA funds are subject to the "use it or lose it" rule.  At the end of the plan year, any unused health FSA funds over the carryover limit applicable to that plan year will be forfeited.
  • FSAs must be re-elected every year during the annual open enrollment period. See the Enrollment page for instructions on how to enroll.
    • If an employee does not make an FSA election during the open enrollment period and has a carryover of health FSA funds into the next year, this is a “carryover only” account. The $2.25/month administrative fee that is normally paid by the State will be directly deducted out of a carryover only account. To avoid these administrative fee deductions, an employee should simply elect to contribute to a health FSA during the open enrollment period.
  • Use of your ASIFlex FSA debit card is not paperless!  IRS rules governing FSA program administration require that FSA funds are only used for qualified medical expenses.  So when you have an FSA, chances are good that ASI Flex will request that you provide backup documentation in order to substantiate certain card transactions. Substantiation is simply documentation that provides an itemized description of each service or supply, date of service (regardless when paid), patient name, provider name and dollar amount. This can be in the form of an itemized statement from the provider that lists each service/supply provided, or an insurance plan Explanation of Benefits (EOB).  The following chart illustrates when documentation may be required.
Type of expense Substantiation not required Substantiation required
Dental   ✓
Vision   ✓
Medical   ✓
Prescription and other plan copays ✓ You must be enrolled in your employer plan and that enrollment must be reported to ASIFlex ✓ If you are not enrolled in your employer plan
Over-the-counter products ✓ If purchased at an IIAS* merchant that inventories and identifies eligible expenses ✓ If purchased at a non-IIAS merchant
Recurring expenses from same provider for exact same dollar amount ✓ Required only for the first transaction ✓ Required if provider differs or the dollar amount varies
* IIAS stands for inventory information approval system. It is a point-of-sale technology used by retailers that accept FSA debit cards, which are issued for use with medical flexible spending accounts (FSAs), health reimbursement accounts (HRAs), and some health savings accounts (HSAs) in the United States.
  • If substantiation is not provided in timely fashion, your ASIFlex FSA debit card can be deactivated until the appropriate substantiation is provided or the expense is repaid to ASIFlex.
  • ASIFlex conducted a debit card webinar in early 2022 to help support employees and their families with understanding how the ASIFlex FSA debit card process works:
FSA HSA
Contribution period Payroll contribution must be re-elected every year during open enrollment Payroll contribution may be adjusted any time during the year
Investment option Funds may not be invested (they are simply kept on an FSA debit card) Funds may be invested and are tax-free when withdrawn to pay for qualified medical expenses
Funds expiration General/Limited Purpose Health FSA
Any unused funds up to the applicable plan year carryover limit may be carried over from year to year. At the end of a plan year, any unused funds over the applicable plan year carryover limit will be forfeited.

Funds do not expire

If you leave state service, change health plans or retire, your HSA money stays with you

If you switch to a health plan that makes you ineligible to continue contributing to your HSA, you may continue to use the money in your account for qualified medical expenses (however, you can no longer make additional contributions)
Enrollment eligibility General Purpose Health FSA
Any State employee not enrolled in an HSA-qualified high-deductible health plan can enroll

Limited Purpose Health FSA
Any State employee enrolled in an HSA-qualified high-deductible health plan can enroll 		Must be enrolled in an HSA-qualified high-deductible health plan like the Anchor Choice Plan with HSA
FSA type Who should enroll Qualifying expenses Contribution limit (2024 plan year) Carryover limit (2024 into 2025)
General purpose healthcare FSA Eligible employees that are NOT covered by the Anchor Choice Plan with HSA or other HSA-qualified high deductible health plan coverage Medical, dental and vision expenses $3,200 $640
Limited purpose healthcare FSA Eligible employees that ARE covered by the Anchor Choice Plan with HSA or other HSA-qualified high deductible health plan coverage Dental and vision expenses $3,200 $640

Any State employee that satisfies all of the following criteria is generally eligible to enroll in an FSA:

Any State employee that satisfies the criteria above and is NOT enrolled in an HSA-qualified high deductible health plan (e.g., Anchor Choice Plan with HSA) is eligible to enroll in a general healthcare FSA.

Any State employee that satisfies the criteria above and IS enrolled in an HSA-qualified high deductible health plan (e.g., Anchor Choice Plan with HSA) is eligible to enroll in a limited purpose healthcare FSA.

Enrollment periods

Employees may enroll in or change their FSA election(s) during one of the following periods:

Enrollment process

Step 1: Do your research!

  • Visit the virtual benefits fair to watch a recorded ASIFlex presentation and review ASIFlex materials.
  • Talk to ALEX for help determining how much to set aside.
  • Review the detailed benefits information on this page and at www.asiflex.com.

Step 2: Enroll!

Visit the Benefits Enrollment page for all the guidance you’ll need to enroll in benefits or make changes to existing benefits elections.

Qualified FSA Expenses

Letter of Medical Necessity

Certain medical expenses—e.g., dietary supplements, cosmetic procedures, and weight loss programs—are not reimbursable under a Health Care FSA unless a licensed health care professional states that the service or product is medically necessary.

To claim reimbursement for such expenses, please have your licensed health care professional complete the Letter of Medical Necessity and submit it to ASIFlex.

FSA Store Cardless Pay

ASIFlex and FSA Store have teamed up to make the consumer shopping experience easier and more secure. With ASIFlex’s Cardless Pay service, you no longer need to use any credit or debit cards. Simply log into your ASIFlex account, link over the FSA Store, and select your products and proceed to check out. Payment to the FSA Store will be made directly from your ASIFlex account.

Traditional Claim Reimbursement

ASIFlex offers several easy ways to submit claims for reimbursement. You do not have to choose only one option; you can use multiple options throughout the year.

  • Automatic reimbursements by FSA debit card
    • Most FSA debit card swipes will adjudicate immediately but you may have to provide ASIFlex with supporting documentation later to prove the expense was an eligible one. This is called “substantiating a claim.” The easiest way to substantiate a claim is using the ASIFlex mobile app. Download the app and log in to your account. Then, just snap a picture of your insurance plan explanation of benefits (EOB) statement, or itemized statement from your provider and submit a claim via the app. It’s easy and it’s fast!
    • You may also substantiate a claim through your online account at www.asiflex.com
  • Manual reimbursements

Reimbursements will be made to you within three business days following receipt of a complete claim. Log in to your ASIFlex account to sign up for direct deposit reimbursement to a bank account of your choice. You can also sign up for email and text alerts.

Please contact ASIFlex if you have questions regarding your FSA: