If your employer offers a Health Flexible Spending Account (FSA), you can enroll in that plan from your Gusto account if you’re eligible (as a new hire, during open enrollment, or if you've experienced a qualifying life event).
Follow these steps to enroll in or waive this benefit:
Here are the maximum annual limits for Health Flexible Spending Arrangements (including limited-purpose FSAs):
Both the employer and employee can contribute up to the IRS max. For example, if both you and your employer contribute the max $3,050 for 2023, your account balance will be $6,100.
The limit also does not include rollover amounts. If your employer allows a rollover, your rollover amount is added to your election for the new plan year.
If you have two FSAs in one calendar year due to an employer change, you may contribute more than the IRS limit.
Your Health FSA can be spent on eligible medical, dental, vision, and pharmacy expenses incurred during your Health FSA policy year. For example, if your Health FSA is active from 1/1/22-12/31/22 you cannot pay for services rendered in 2021.
To learn more about what specifically is eligible, here are a few more resources:
Keep in mind that if you're enrolled in a Limited Purpose FSA, you're can only use your funds for eligible dental and vision expenses. Medical and pharmacy expenses will not be allowed.
FSA: Employees can make pre-tax contributions to their FSA accounts, which are pre-funded by the employer and repaid through payroll deductions. Money in FSAs can be used to cover eligible expenses and must be used before the end of the plan year. This is known as the “use it or lose it rule.”
HSA: A tax-advantaged account for people who are enrolled in a high-deductible health plan (HDHP). Pre-tax dollars are contributed to the account and accumulate each year that you’re enrolled without expiring. These funds can be used to cover eligible medical expenses and investments.
At the end of your company’s plan year, you have 90 days to submit claims for services rendered during your previous plan year. This is called the runout period.
Additionally, your company can choose to either offer a grace period or a rollover in addition to the runout period.
This is the time period after your policy ends that you are eligible to use your Health FSA funds for new expenses. This is typically 75 days.
This is an amount of money that can rollover from one policy year to the next as long as the employee renewed their Health FSA. The maximum an employer can allow an employee to rollover in 2022 is $570. The rollover limit for 2023 is $610.
During the 90-day runout period, if your company offers a rollover, you will be eligible to submit claims for previously rendered services and use your card for new expenses incurred. You can only use your rollover by submitting a claim. Using your card will draw from your current plan year's funds and the transaction will later be denied. Then you'll have to repay the balance before submitting the transaction as a claim for reimbursement.
You can see whether your company offers a Grace Period or Rollover in your Gusto profile by clicking into your Health FSA benefit.
A Health FSA is terminated on the last day of employment.
Runout period: A dismissed employee has 90 days from the last day of employment to submit claims for any eligible services rendered during the policy period. The policy period starts on the effective date of the FSA and ends on the last day of employment. For example, if your last day of work is November 1st, you have until January 30th to submit claims. Those claims must be for eligible expenses that you incurred during the policy period and on or before November 1st.
After the 90-day runout period, any remaining funds left in your account are forfeited to your previous employer.
You can see your last day to submit claims in your Gusto Benefits Card Manager: click into your Health FSA and look at the “Deadlines” section.
If you didn’t register for your Gusto Benefits Card Manager account during your employment, please reach out to [email protected] for your sign-in credentials.
The annual amount you chose to contribute during your enrollment is locked in for the company’s policy year. Your total election amount is divided by the number of regular payrolls your company will run during the policy year and deducted evenly from your paychecks. Health FSA elections cannot be changed unless you experience a qualifying life event.
If you are experiencing a qualifying life event and think you're eligible to make changes to your Health FSA contribution amount, please reach out [email protected] for help.
Keep in mind that if you want to lower your contribution amount, it can only be lowered up to the amount that has already been used or contributed, whichever is larger.