2026 Flexible Spending Accounts

Health Care Flexible Spending Account

For employees enrolling in the Lion Advantage Flex or the Lion Traditional medical plan, or those who may be enrolled in a plan outside of Penn State, you may choose to participate in the Health Care Flexible Spending Account (FSA), managed through HealthEquity. Like the Health Savings Account (HSA), contributions made to the Health Care FSA are tax-free. However, unlike the HSA, funds contributed must be used in the same plan year for eligible health care expenses. The contribution maximums for 2026 are:

  • $3,400 (minimum $120 annually)

Guidelines for participation in this plan

  • This election must be made during benefits open enrollment and cannot be changed, unless of a life-qualifying event.
  • Postdoctoral SCHOLARS are ELIGIBLE for the Health Care and Dependent Care Flexible Spending Account (FSA).
  • Postdoctoral FELLOWS are NOT ELIGIBLE for either FSA.
  • CANNOT have a spouse enrolled in a Health Savings Account (HSA).
    • If you are the Penn State employee and your spouse is employed elsewhere and enrolled in a high-deductible health plan with an HSA, a Health Care FSA cannot be opened by either employee. The IRS does not permit use of a Health Care FSA when contributing to an HSA.
  • Funds can be used for yourself, spouse, or eligible dependent children up to the age of 26.
  • If you terminate, or experience a job change to part-time, you FSA elections will end and you will have 90 days after termination/job change to submit claims through your last day of full-time employment.

2026 IRS Allowable Rollover for Health Care FSA

Employee MUST ELECT the Health Care FSA for 2026 in order to receive the carry-over funds.

  • Carry-over $660 of 2025 into 2026 if enrolled for 2026 and if actively employed through the end of April 2026.
    • Carry-over funds are not available until after the claim submission period ends on March 31, 2026.

Dependent Care Flexible Spending Account

Dependent Care FSA plans are available to all employees regardless of health plan enrollment. Funds contributed must be used in the same plan year for eligible dependent care expenses. The contribution maximums for 2026 are:

  • $7,500 per year per household (minimum $120 annually)
  • $3,750 for married individuals filing a separate tax return

Guidelines for participation in this plan

  • This election must be made during benefits open enrollment and cannot be changed, unless of a life-qualifying event.
  • Postdoctoral SCHOLARS are ELIGIBLE for the Dependent Care FSA.
  • Postdoctoral FELLOWS are NOT ELIGIBLE for the Dependent Care FSA.
  • Dependent FSA's can be used for work-related daycare for dependents up to the age of 13, nursery school, or adult daycare service of an eligible tax dependent.
  • They are NOT for dependents' medical expenses.
  • If you terminate, or experience a job change to part-time, you FSA elections will end and you will have 90 days after termination/job change to submit claims through your last day of full-time employment.

Features

  • Allows employees to set aside pre-tax funds to reimburse work-related, day care expenses for eligible dependents.
  • Day care expenses include child day care and elder care.
  • Funds must be in the dependent care FSA before they may be used.