Flexible Spending Accounts
Regular full-time employees may participate in either or both of the following Flexible Spending Accounts (FSA):
- Health Care Flexible Spending Account
- Dependent Care Flexible Spending Account
These accounts allow the employee to set aside pre-tax funds that may be used to pay for eligible health care expenses and dependent care expenses. The Flexible Spending Accounts are administered by Highmark Blue Shield.
Understanding Flexible Spending Accounts
Participation in either of the Flexible Spending accounts is voluntary, but employees must re-enroll during the open enrollment each year, and employee contributions may not be changed during the plan year.
With either of type of FSA, funds may be used only for expenses incurred during the plan year, and with the exception of $500 in the health care FSA, may not be rolled over from year to year. Any remaining funds in the accounts at the end of the plan year will be forfeited.
Following are some of the features specific to each type of Flexible Spending Accounts:
Health Care Flexible Spending Account
- Funds in a health care FSA may be used to pay for out-of-pocket medical, dental, and vision care expenses for the employee or eligible dependents who are on the employee's plan
- The health care FSA acts like an up-front loan: funds do not not have to be in the employee's account in order for the employee to use them to pay for medical expenses
- The employee does not have to be enrolled in a Penn State health plan in order to be eligible for a health care FSA
- For 2016, the maximum allowable contribution to a health care FSA is $2,500
- If two Penn State employees are married and have elected Family coverage under the PPO Savings Plan with an HSA, a Health care FSA cannot be opened under either employee's name
- The IRS does not permit use of a health care FSA when enrolled in an HSA
- The Dependent Care FSA is available to either employee up to the IRS limits, however
Dependent Care Flexible Spending Account
- This account allows employees to set aside funds on a pretax basis to reimburse work-related day care expenses for eligible dependents
- Funds must be in the dependent care FSA before they may be used to pay for dependent care expenses
- Unlike the health care FSA, money contributed to the dependent day care FSA is subject to Pennsylvania state income tax
- For 2016, the maximum allowable contribution to a dependent child care FSA is $5,000
- For more information, please see the dependent care brochure from Highmark
Paying for Medical Expenses with a flexible spending account
The Highmark Blue Shield website allows FSA account holders to request that payment for the cost share (copayments, deductible, coinsurance) of their medical claims be made directly to their network doctor or hospital. This prevents the account holder from having to “pay up front” at the provider and then wait for reimbursement from their FSA.
- FSA account holders may also elect to have the payment sent directly to them, either by requesting that the payment be direct-deposited into their bank account or sent to them in the form of a check.
Plan members may use their Highmark FSA "debit" card to pay for eligible medical expenses. Use of the debit card is voluntary, but provides the convenience of not having to pay out-of-pocket and wait for reimbursement.
- When using the debit card to pay for medical expenses, account holders may need to submit receipts to Highmark in order to satisfy IRS regulations for “substantiation”.
All FSA reimbursements must be submitted to Highmark no later than March 31 of the following calendar year for active employees.
Account holders who have left the university or who have retired have 90 days from the termination/retirement date to submit receipts for reimbursement. Please note that submitted receipts must be claims that were incurred on or before the termination/retirement date.
See the tax savings of an FSA at Frequently Asked Questions
New For 2016 - Carry-Over Provision
Penn State will implemented a carry-over provision for the Health Care Flexible Spending Account (FSA), effective January 1, 2016.
Enrollees in the 2016 Health care FSA with balances remaining from a 2015 Health Care FSA are permitted to carry over up to $500 into the 2016 benefit year (as permitted by the IRS). In order to properly access any carried-over funds, please be aware of the following stipulations:
- The FSA debit card cannot be used to pay 2015 claims submitted after Dec. 31, 2015. Any 2015 claims need to be submitted online via the Highmark FSA portal (www.highmarkblueshield.com) from Jan. 1 – March 31, 2016. Claims forms are also available at: Medical, Prescription, and Spending Account Forms for Highmark-Members.
- Any FSA balance still remaining as of April 1, 2016 will be carried over (up to $500) and added to the account holder's 2016 FSA balance and can be used for 2016 dates of service until exhausted.The carried over FSA funds will be accessible via the debit card. The carry-over provision will continue under the same guidelines from 2016 into 2017.
- Beginning Jan. 1, 2016, any FSA claims submitted for 2016 dates of service will be debited against the account holder's 2016 FSA balance. The FSA debit card may also be used to pay 2016 claims.
Medical, Prescription, and Spending Account Forms for Highmark Members provides the most up-to-date versions of Highmark's spending account reimbursement claim forms.
Employees who leave or retire from Penn State
Employees who are leaving or retiring from Penn State have 90 days from their last day of work to submit their FSA claims for processing.
- Comprehensive List of Eligible Expenses
- Flexible Benefit Summary Plan Description
- Quick Start Guide
- How to request a new FSA debit card
- Claims Submission Instructions
- How to Verify Debit Card Transactions
- How to Pay Expenses using your FSA
- Dependent Care Brochure
- Certification of Change in Family Status
- Transportation Expense Reimbursement Form
- IRS publication regarding tax returns and tax-favored accounts
All questions about FSA funds or claims should be directed to Highmark at 800-914-4384