Flexible Spending Account (FSA)

HealthEquity Update July 21, 2025: 

To better protect your HealthEquity account(s), passkeys will soon be required to access your plan. Passkeys will provide the following enhancements to your account(s):

• No passwords needed = fewer account lockouts
• Streamlined, mobile-first login via HealthEquity Mobile app and EZ receipts app
• Stronger fraud protection with device-bound passkeys (authentication)
• Easy-to-use tools that boost your satisfaction with accessing your account

The following are a few quick steps to set up your HealthEquity account(s) and get ready for passkey:

1. Download the HealthEquity Mobile app – You will need the HealthEquity Mobile app to authenticate your account – even when using online or when calling customer service. Passkeys allow for a faster, simpler way to manage your benefits.
2. Update your mobile phone number and email – These updates can be made within your current HealthEquity member portal. Without updated information being on record with HealthEquity, you will not be able to set up passkey and will be locked out of your account.
3. Engage with upcoming educational emails or mailings – HealthEquity will be communicating the upcoming changing with members. Please be certain to follow additional instructions that are sent to you ahead of the passkey changes.
4. Be ready to activate passkey login – Ensure that you have followed all HealthEquity recommended steps to ensure a smooth transition to passkey when the time comes.

HealthEquity has also provided a Member Resource Hub for members to access more details regarding the upcoming passkeys change.

Feel free to also connect with HealthEquity by calling (866) 346-5800.

Flexible Spending Account(s) (FSA)

Penn State’s healthcare and dependent care flexible spending accounts (FSA) are managed through HealthEquity. Each year the IRS determines the maximum contributions allowed to each FSA. The below chart outlines those maximums for the current plan year.

Flexible Spending Account Pre-Tax Benefit Summary Plan Document
Flexible Spending Account Frequently Asked Questions

Health Care FSA

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 My HealthEquity. Contributions made to the Health Care FSA are tax-free. Funds contributed must be used in the same plan year for Eligible Health Care Expenses. Also helpful, is an additional list from HealthEquity regarding Non-Qualifying Medical Expense List. See Health Care FSA flyer for more information.

Elections to participate in the health care FSA must be made each year during the annual benefits open enrollment period. Elections cannot be changed unless there is a qualifying life event, such as marriage, divorce, birth of a child, adoption, etc. If you experience a qualifying life event that allows an FSA change, please submit your change request via Workday within 31 days of the date of the event.

Guidelines for participation in this plan

• This election must be made as a new hire, during benefits open enrollment, or due to an IRS qualifying life event.
• The health care FSA acts like an up-front loan; entire elected amount is available as of enrollment mid-year (new hire or IRS qualifying life event) or at the start of the new plan year (open enrollment). Penn State’s plan year runs from January 1 through December 31.
• 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.

The IRS allows spouses to each elect the contribution maximum, provided they are not enrolled in a qualified high deductible plan (like Penn State’s Lion Advantage HSA Plan).

If two Penn State employees are married and have elected FAMILY coverage under the Lion Advantage HSA plan, a Health Care Flexible Spending Account (FSA) cannot be opened under either employee's name. In addition, 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 Flexible Spending Account cannot be opened by either employee. The IRS does not permit use of a health care FSA when enrolled in an HSA. However, the Dependent Care FSA is available to either employee up to the IRS limit.

If you have a remaining balance of in your health care FSA by the end of the current plan year, Penn State has a rollover provision that allows you to carry into the next plan year, however, you MUST re-enroll during Benefits Open Enrollment for the following benefit year to receive any rollover funds and remain an active employee through the period in which the rollover is applied to your account (mentioned above through the end of April). The rollover provision WILL NOT apply if you choose to enroll in the Lion Advantage HSA plan for the next plan year.

IRS Allowable Rollover for Health Care FSA

Unused funds in a health care FSA, per the below schedule, may be carried over to the following plan year provided you re-enroll in the healthcare FSA benefit for the following year and remain an active employee beyond the claim submission run out period of March 31 of each plan year. Employee MUST ELECT the Health Care FSA for 2026 in order to receive the carry-over funds.

• Rollover $660 of 2025 into 2026 if enrolled for 2026 and if actively employed through the end of April 2026.
  • Rollover funds are not available until after the claim submission period ends on March 31, 2026.
• Rollover $680 of 2026 into 2027 if enrolled for 2027 and if actively employed through the end of April 2027.
  • Rollover funds are not available until after the claims submission period ends on March 31, 2027.

*Employee MUST ELECT THE FSA FOR THE NEXT PLAN YEAR IN ORDER TO RECEIVE THE ROLLOVER as outlined above*

Dependent Care Flexible Spending Account (FSA)

You have the option to enroll in a dependent care FSA, managed through My HealthEquity, regardless of which Penn State health plan you participate in, or whether you participate in a Penn State health plan at all. Contributions made to a dependent care FSA are taken before federal taxes from your paycheck. Funds contributed must be used within the same plan year for Eligible Dependent Care Expenses. Also helpful, is an additional list from HealthEquity regarding Non-Qualifying Medical Expense List. See Dependent Care Flexible Spending Account flyer for more information.

Elections to participate in the dependent care FSA must be made each year during the annual benefits open enrollment period. Elections cannot be changed unless there is a qualifying life event, such as marriage, divorce, birth of a child, adoption, change in day care cost, etc. If you experience a qualifying life event that allows a dependent care FSA change, please submit your change request via Workday within 31 days of the date of the event.

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.

Changes to your Account

Updates may be made to either flexible spending account within 31 days when you experience a Qualifying Life Event change such as: marriage, birth, adoption, etc. To do so, please visit Workday via the WorkLion portal. Use the Flexible Spending Account Qualifying Event Chart to determine what changes may be eligible.