Welcome, Flexible Spending Account Participants! As an FSA plan holder, you can save significant dollars on IRS approved expenses. As you begin or continue to use your account more, here are four things every FSA participant should know.
OTC Expenses are Eligible
Under the passage of the CARES Act in March of 2020, the IRS rolled back a years-long rule that prohibited over-the-counter (OTC) items for reimbursement from pre-tax accounts unless you had a physician’s note or a prescription. Now, pre-tax account holders can use their plan to purchase OTC medications right at the point-of-service. This means any Flexible Spending Account (FSA) or Health Savings Account (HSA) member can get even more out of their plan by saving money on common OTC expenses.
Another key part of this act also allows feminine care products to be eligible for reimbursement. Tampons, pads and other fem care products can be purchased with your FSA or HSA too.
Health FSA Carry Forward Increases (for some plans)
Also passed under the CARES Act is the increase in the maximum carry forward limit. If your FSA plan has the carry forward provision, that means you can roll over unused Health FSA funds – previously up to $500 – into the next plan year. With the CARES Act update, the maximum rollover limit has increased by $50 to $550. And, the amount will be indexed annually, so that number will change in years to come. For 2022, the maximum amount permitted to roll over is $570. For 2023, that number increases to $610.
Please note: the increase is not mandatory, and some employers may choose to keep the maximum rollover amount to $500. Check with your HR or benefits department to see your specific plan rules.
Health FSA Contribution Limit Changes
The maximum contribution limit is indexed annually and is subject to change in future years. For 2023, the maximum election amount is $3,050.
Resources for FSA Participants
Whether you’re a legacy account holder, or signing up for the first time, there are many tools available to you to make managing your plan – and your funds – easier than ever. Check them out below.