Understanding Flexible Spending Accounts

If you enroll in UVA PPO or re-enroll in the Choice plan option, you may enroll in a Health Care Flexible Spending Account (FSA). Employees enrolled in the Health Savings plan are not eligible to enroll in a Health Care FSA.

A Health Care FSA helps you pay for eligible out-of-pocket health care expenses, such as copays, deductibles, and certain over-the-counter medications, using pre-tax dollars. 

Although, your contributions are deducted from each paycheck throughout the year, your full annual Health Care FSA election is available after your first paycheck of the plan year. 

For example, if you elected to have a $2,000 FSA and had an expensive medical procedure in January, you can use the full $2,000 even though only one paycheck's worth of contributions has been deducted. 

Note: You must first open your FSA account for your full annual election to become available.

Unlike a Health Savings Account (HSA), unused FSA funds do not roll over from year to year, so you should plan to use your full annual contribution during the plan year. 

You also must re-enroll in your FSA each year.

Employees enrolled in UVA PPO or the Choice plan are not eligible to enroll in an LPFSA.

A Limited Purpose Flexible Spending Account helps you pay for eligible out-of-pocket dental and vision expenses using pre-tax dollars. It is designed to be used alongside a Health Savings Account (HSA).

An LPFSA may be especially beneficial if you have already contributed the maximum amount to your HSA and want to set aside additional pre-tax dollars for eligible dental and vision expenses.

An LPFSA may be especially beneficial if you have already contributed the maximum amount to your HSA and want to set aside additional pre-tax dollars for eligible dental and vision expenses.

Although your contributions are deducted from each paycheck throughout the year, your full annual LPFSA election is available after your first paycheck of the plan year. 

Note: You must first open your LPFSA account for your full annual election to become available.

Any benefits-eligible employee may enroll in a Dependent Care Flexible Spending Account (FSA).

Unlike a Health Care Flexible Spending Account (FSA) or a Limited Purpose Flexible Spending Account (LPFSA), your full annual DCFSA election is not available upfront. Instead, funds become available as contributions are deducted from your paycheck and deposited into your account.

Depending on your income and tax situation, you may receive a greater tax benefit from the federal Child and Dependent Care Tax Credit than from a Dependent Care Flexible Spending Account. Consult a qualified tax professional to determine which option is best for you.

To be eligible for a Dependent Care Flexible Spending Account (FSA), your dependent must meet one of the following criteria:

• Be under age 13 at the time care is provided and be claimed as a dependent on your federal income tax return.
• Be unable to care for themselves because of a disability, such as an adult child or an elderly dependent. There is no age requirement for dependents who meet this criterion.

In addition, your eligible dependent must live with you for more than half of the year for you to use DCFSA funds to pay for their care.

The Full FSA contribution amount you choose for the year is available as soon as the account is open. Payroll deductions for the FSA would continue through the remainder of the year.

Dependent Care Flexible Spending Account (FSA) funds are available after they have been deposited in your account by payroll deductions each paycheck. It takes a few bank days after payday for payroll-deducted funds to show in your account.

These funds must be used by the end of the calendar year. However, UVA has a grace period of 2 1/2 months. This allows you to spend FSA money through March 15 of the following year. After the grace period ends, you will lose any remaining money in your FSA account. 

Mandatory Direct Deposit: For all paper claims, direct deposit is required. If you are a new enrollee, you must provide direct deposit information to Fidelity for reimbursement of all non-debit transactions. You can enter your direct deposit information on your personal Fidelity account beginning Jan. 1, 2027.

Important: Coordinate your benefit elections with your spouse before enrolling.

If you and your spouse both contribute to a Dependent Care Flexible Spending Account (FSA), your combined annual contributions cannot exceed the IRS maximum. Exceeding the limit is not a qualifying life event, so you will not be able to change your election during the plan year. Any overcontribution must be addressed when you file your federal income tax return.

If you enroll in the UVA Health Savings Account (HSA) plan, your spouse should not enroll in a full Health Care Flexible Spending Account (FSA) during the same calendar year. If this or another coordination issue occurs, you generally will not be able to cancel your elections or make retroactive changes to your contributions to correct any resulting tax issues.

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