Unsure of what a certain word means? Search our glossary for definitions of commonly used words.
Annual Election Amount
This is the total dollar amount you elect to put into your FSA at the beginning of each plan year.
A dependent is a person whose expenses are eligible for reimbursement through the employee’s FSA. A dependent is usually an employee’s spouse or child(ren) under age 27.
Items that are reimbursable under the FSA plan are classified as “eligible expenses” according to IRS rule. See a sample list of eligible expenses.
Taxes collected for Social Security and Medicare benefits.
Flexible Spending Account
(Also known as an FSA)
A pre-tax benefit plan that enables the employee to save 30-40% on eligible expenses. By enrolling in this plan, the participant saves on state, federal, and FICA taxes.
An extension of the period during which expenses can be incurred.
A designated time prior to the start of your plan year during which employees can enroll in the FSA plan and change their benefit elections.
The twelve-month period during which the annual election is effective.
A period of time after the plan year ends during which participants may submit receipts for expenses which were incurred during the plan year or grace period.
Uniform Coverage Rule
This rule allows you to access your entire annual election for the Health FSA immediately after the start of the plan year. All other accounts are “pay-as-you-go.” This rule only applies for the Health Flexible Spending Account.
Use-It or Lose-It Rule
An IRS rule that states that employees must spend any remaining balance in their FSA by the end of the grace period. If you don’t spend the money, you forfeit it.