Flexible Spending Account (FSA)
Health Care Flexible Spending Account
Provided you are not enrolled in the Lion Advantage Plan, 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 Flexible Spending Account are tax-free. However, unlike the HSA, funds contributed must be used in the same plan year for eligible health care expenses. For 2023, the contribution maximum is $3,050. This election must be made during benefits open enrollment and cannot be changed, unless of a life-qualifying event.
Dependent Care Flexible Spending Account
Regardless of which health plan you choose, you can elect a Dependent Care FSA. This account can be used for dependent child expenses up to the age of 13. Once your child reaches age 13, they are no longer eligible. This account is used to reimburse you for dependent care expenses, such as child day care, elder care, etc. The contribution maximums for 2023 are:
- $5,000 per year per household
- $2,500 for married individuals filing a separate tax return
2023 IRS Allowable Rollover:
Health Care FSAs – Employee may:
- Carry-over $570 of 2022 into 2023 if enrolled for 2023
*Employee MUST ELECT THE FSA FOR 2023 IN ORDER TO RECEIVE THE 2023 CARRY-OVER*
Penn State employees with questions may contact HR Services at 814-865-1473 or through WorkLion.
Health Care FSA
If you elect the Lion Traditional Plan, or do not elect either Penn State health plan, you have the option to enroll in a health care 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. 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.
- Funds may be used to pay for out-of-pocket medical, prescription, dental, and vision care expenses for the enrolled employee and their eligible dependents.
- Unused funds of up to $550 in a healthcare FSA may be carried over to the following plan year provided you re-enroll in the healthcare FSA benefit for the following year.
- The health care FSA acts like an up-front loan; entire elected amount is available to the start of the new plan year. Penn State’s plan year runs from January 1 through December 31.
- If you terminate University employment, your FSA elections will be cancelled. Reimbursements will be limited to expenses incurred up to and including your termination date. You will have 90 days from your termination date to submit requests from the period of your participation.
- In order to view your spouse and/or over age 18 children’s claims details on the HealthEquity website and mobile app, you are required by HealthEquity to complete a HIPAA form. After the form is on file with HealthEquity, all claims details will populate in your account. If you have any questions regarding their policy, please contact HealthEquity at 866-346-5800.
- Postdoctoral SCHOLARS are ELIGIBLE for the Health Care and Dependent Care Flexible Spending Account (FSA). Postdoctoral FELLOWS are NOT ELIGIBLE for either FSA.
The money in your FSA can be spent on qualified medical expenses or you and your family. The full listing of eligible expenses can be found on the HealthEquity website at: https://learn.healthequity.com/qme.
The IRS allows for spouses to each elect the contribution maximum, provided they are not enrolled in a qualified high deductible plan (like Penn State’s Lion Advantage Plan).
If you have a remaining balance of in your health care FSA by the end of the current plan year, Penn State has a carryover 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 in order to receive any carry-over funds. The carry over provision WILL NOT apply if you choose to enroll in the PPO Savings Plan with HSA for the next plan year.
If two Penn State employees are married and have elected FAMILY coverage under the PPO Savings Plan with an HSA, 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 limits.
Dependent Care 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. See Dependent Care Flexible Spending Account flyer for more information.
Note: Dependent FSA's can be used for work-related daycare, nursery school, elder care for dependent children up to the age of 14. They are NOT for a dependents’ medical expenses.
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 an FSA change, please submit your change request via Workday within 31 days of the date of the event.
- 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.
- Money contributed to the dependent care FSA is subject to Pennsylvania state income tax.
The dependent care FSA contribution maximum for calendar year 2023 is $5,000 per household. The IRS does not allow for spouses to each elect the contribution maximum, as the maximum is only allowed per household.
Spousal Access to FSAs
In order for your spouse to submit for reimbursement of eligible FSA expenses, please be sure to contact HealthEquity by calling 866-735-8915 or complete the Account Authorization Form and fax or email to HealthEquity.
Changes to your Account
Updates may be made to either flexible spending account when you experience a Qualifying Life Event change such as: marriage, birth, adoption, etc. To do so, please visit Workday via the WorkLion portal.