Flexible Spending Account (FSA) FAQ
- General Information
- What is an FSA?
- What types of FSAs are available to me?
- Who do I call if I have questions?
- How do I participate in an FSA?
- When does my FSA become effective?
- Can I change my spending account goal during the year?
- Once I enroll, do I have to re-enroll each year?
- What happens if I have money remaining in my account at the end of the year?
- My spouse’s employer also offers FSAs. How does this affect my FSA accounts at Stanford?
- Health Care Flexible Spending Accounts
- Who can I cover?
- Can I cover my domestic partner under the Health Care FSA?
- What is the maximum amount I can contribute?
- What is an FSA debit card?
- Why do I have to prove payment when I use the FSA debit card?
- Can I use my FSA debit card to pay for mail order pharmacy purchases?
- Are over-the-counter (OTC) medicines eligible for reimbursement?
- Are medical devices and supplies eligible for reimbursement?
- Are there advantages of a health care FSA versus the federal income tax deduction?
- Dependent Day Care Flexible Spending Accounts
- Who can I cover?
- Can I cover my domestic partner (or my partner’s children) under the dependentday care FSA?
- What is the maximum amount I can contribute?
- Are there any advantages of using a dependent day care FSA versus the Child Care Credit on my federal income tax return?
- I participate in the Stanford Child Care Subsidy Grant program. How does that affect my dependent day care FSA?
- Filing a Claim and Receiving Reimbursement
- How am I reimbursed?
- How do I file claims?
- When I submit a claim, or if I have to provide substantiation for a debit card reimbursement, what can I use as proof of payment?
- When do I need to provide a Letter of Medical Necessity from my doctor?
- What information needs to be included in the Letter of Medical Necessity from my doctor?
- When will I receive a payment from the FSA?
- Can I set up direct deposit for reimbursements?
- Other Important Information
These FAQs will help you understand how Flexible Spending Accounts work and how to use them to your advantage. For a complete description of your Stanford benefits, refer to the Plan Summary documents in the Resource Library. If there are any differences between this information and the plan documents, the plan documents govern.
Stanford's flexible spending accounts are administered by Benesyst (a TASC company). If you enroll in a health care or dependent day care spending account, Benesyst will mail you a debit card in a plain white envelope and send you information regarding a welcome kit. For questions about an FSA for 2014 you can call Benesyst 855- 842-4913 Monday-Friday 8AM-5PM and speak with a member services representative or you can go to partners.benesyst.net/stanford for information.
FSA Rollover Provision
Stanford is aware of the recent IRS ruling that allows employers to offer a roll-over of unspent funds (up to $500) under the Health Care Flexible Spending Account.
Because of the timing of the ruling we cannot accommodate any changes to the Health Care FSA plan for 2013-14 plan year. Stanford will take a look at this ruling for consideration for the 2014-15 plan year. Should Stanford decide to add this rollover provision to our FSA plan, we will communicate this information to you.
What is an FSA?
Flexible Spending Accounts (FSAs) allow you to be reimbursed for certain health care or dependent day care expenses you pay out of pocket by taking contributions from your paycheck before taxes are deducted and reimbursing yourself from your FSA account tax free. You save money by lowering your taxable income and paying for anticipated out-of-pocket expenses with FSA dollars through tax free reimbursements.
What types of FSAs are available to me?
Stanford Benefits offers two types of FSAs: health care and dependent day care.
A health care FSA reimburses eligible expenses not covered by your health care plans (medical, prescription drugs, dental, orthodontia and vision). You can use this account to pay these expenses for yourself and your dependents, even if your dependents are not covered by a Stanford health care plan.
A dependent day care FSA pays for child care (for your qualifying child who is your dependent and is under age 13) or adult day care expenses necessary to allow you and your spouse to work, seek employment or attend school full time.
Note: To view a list of reimbursable health care expenses, go to partners.benesyst.net/stanford, then click on Eligible Expense Summary. For additional information, please refer to www.irs.gov.
Who do I call if I have questions?
If you have questions about eligibility, how FSAs work, or specific questions on your contributions or claims, call Benesyst (a TASC company) at 650-736-2985 and press option 8 or call 855-842-4913.
How do I participate in an FSA?
To participate, you must enroll within 31 days of your date of hire, or elect to participate during annual Open Enrollment.
If you have a life event change (for example, birth or adoption of a child), then you may be able to enroll without waiting for annual Open Enrollment, if you enroll within 31 days of the change. (See Life Events for more information.)
When does my FSA become effective?
Your FSA becomes effective on the date you enroll. Unlike most other Stanford benefits, an FSA does not start on your hire date. Contributions to your account begin as soon as administratively possible after you enroll.
Can I change my spending account goal during the year?
Generally, no. Your annual election amount is locked for the entire plan year. The exception is if you have a life event change (for example, you have a baby); then you may be able to enroll without waiting for annual Open Enrollment. You must enroll within 31 days of the change (see the Life Event section for more information), but the effective date is the date of the life event. Your new contributions start as soon as administratively possible.
Note: A change to your contribution amount is not retroactive. If you increase your amount, the increase cannot cover claims incurred before the effective date of your increase. Call Stanford Benefits at 650-736-2985 and press option 9 for more information.
Important: If you decrease your annual election, the amount of the decrease cannot be less than what you have contributed to the plan year to date.
Once I enroll, do I have to re-enroll each year?
Yes, IRS rules require you make an annual election that does not automatically carry over from year to year. If you want to maintain a dependent day care and/or health care FSA, you must re-enroll each year during annual Open Enrollment. Because you make a new election each year, you have the opportunity to change the amount you elect.
What happens if I have money remaining in my account at the end of the year?
FSA accounts are on a “use it or lose it” basis. You have until December 31 to incur an eligible expense and until April 30 of the following year to submit claims for services you received during the time you were enrolled. You forfeit any money left in your account at the end of the April 30 filing period. For example, you have until April 30, 2014 to submit claims for services incurred while you were enrolled in 2013.
My spouse’s employer also offers FSAs. How does this affect my FSA accounts at Stanford?
There is no impact to your health care FSA election. Both you and your spouse may contribute up to the maximum amounts available, but you cannot submit the same claim to both accounts. You can only be reimbursed once for each claim.
The dependent day care FSA is different. The IRS does not allow you and your spouse to elect a combined amount greater than $5,000 for a calendar year.
Health Care Flexible Spending Accounts
Who can I cover?
If you enroll, you and your eligible dependents are covered under your health care FSA even if you do not cover them under other Stanford benefit plans. For details on who is considered your dependent, look under Medical & Life.
NOTE: Federal law only recognizes opposite-sex and same-sex spouses, as being eligible for this program.
Can I cover my domestic partner under the Health Care FSA?
Current IRS rules do not allow you to be reimbursed for domestic partner expenses through an FSA. Even if you cover your registered domestic partner under Stanford benefit plans, you may not submit health care FSA claims. The exception is if your partner is considered a “qualifying relative” and a “tax dependent” according the Internal Revenue Code rules. For further guidance, please consult your tax advisor.
Note: You can submit eligible claims for children of your registered domestic partner who depend on you for support and who live with you in a regular parent/child relationship.
What is the maximum amount I can contribute?
You can contribute up to $2,500 per year to your HCSA.
Note: Each year, FSA plans must pass a non-discrimination test to show they do not favor highly compensated employees regarding eligibility, contributions and benefits. If Stanford’s FSA plans do not pass the test, Stanford may reduce your election(s) during the year if you are a highly compensated employee as defined by the Internal Revenue Code. Stanford Benefits will notify you if it becomes necessary to reduce your contributions.
What is an FSA debit card?
An FSA debit card is a convenience feature of the plan that allows you to have access to your account funds for eligible health care expenses right at the point of service—at the pharmacy counter or doctor’s office.
When you enroll in a health care FSA or a dependent day care FSA, you will automatically receive a Stanford Benefits debit card from Benesyst (a TASC company). You can use your card with any provider who accepts it. To order additional cards for your dependents, go to partners.benesyst.net/stanford and click "Log into your account" then click on the Card Managment link. When the new window opens, click on the Issue Dependent Card button and enter the name of your dependent who will be using the card.
Why do I have to prove payment when I use the FSA debit card?
The IRS requires the FSA administrator to request proof of payment on some claims to ensure they are part of the list of IRS approved expenses. Be sure to save all receipts when using your debit card. You can send in an itemized receipt and your medical, dental or vision plan’s Explanation of Benefits. The IRS does not allow cancelled checks, credit card statements or balance-due statements as supporting documentation with your claim form.
Can I use my FSA debit card to pay for mail order pharmacy purchases?
Yes, you can use your debit card for these purchases. Unfortunately, not all mail order pharmacies have implemented the IRS-required technology that proves the purchase is valid without submitting a receipt. Keep your receipts since you may be asked to provide documentation.
You can submit these receipts online. Log into Benesyst (a TASC company) at partners.benesyst.net/stanford and choose the Spending Account button under "Manage my spending accounts". Then click on Account Management from the Participant Manager menu. Click on the Reimbursement tab. If a receipt is needed to substantiate a debit card transaction, the VeriFlex column will say "Receipts Required" with a blue link to download a VeriFlex cover sheet. Please complete the form and attach a copy of the receipt and fax back to the number on the form.
Are over-the-counter (OTC) medicines eligible for reimbursement?
Generally no, over-the-counter medicines are not eligible for reimbursement. However, if your doctor provides a prescription prior to purchase, you can receive reimbursement for the cost of over-the-counter (OTC) medicines and drugs. This rule does not apply to reimbursements for the cost of insulin, even if purchased without a prescription.
If you purchase OTC medicines, you cannot use your debit card. You must file a claim along with a copy of the prescription and include an itemized receipt showing the date, the name of the product, and the cost.
If the receipt from your pharmacy/provider doesn’t indicate the name of the OTC product or service, you will need to request a written itemized receipt at the point of purchase.
Are medical devices and supplies eligible for reimbursement?
Equipment and supplies such as crutches, bandages and blood sugar test kits still qualify for reimbursement even if purchased without a prescription. For additional information, please refer to www.irs.gov.
Are there advantages of a health care FSA versus the federal income tax deduction?
Because FSAs give you the opportunity to pay for your eligible expenses using before-tax dollars, there is no need to itemize your expenses on your tax return. You can also use it throughout the year instead of waiting until tax time. Please consult your tax advisor to determine which method is best for you.
Dependent Day Care Flexible Spending Accounts
Who can I cover?
Generally, you can cover:
- A dependent up to age 13 whom you can claim as a tax exemption on your federal income tax return
- Your spouse* (not a domestic partner) who is physically or mentally unable to care for himself or herself
- Your dependent who is physically or mentally unable to care for himself or herself, and you can claim as a tax exemption (subject to certain criteria)
*NOTE: Federal law only recognizes opposite-sex and same-sex spouses, as being eligible for this program.
For details on who meets the dependent requirements, refer to IRS Publication 503 (www.irs.gov/pub/irs-pdf/p503.pdf).We also suggest you review Part III of the Flexible Spending Account (FSA) Summary, located in the Resource Library.
Can I cover my domestic partner (or my partner’s children) under the dependent
day care FSA?
Generally, you may not submit dependent day care FSA claims unless your partner is considered a “qualifying relative” and a “tax dependent” according the Internal Revenue Code rules. For further guidance, please consult your tax advisor.
Your partner’s children, however, may be covered if they meet the eligibility requirements as described in the www.irs.gov/pub/irs-pdf/p503.pdf).. You can also look at these requirements in IRS Publication 503 (
What is the maximum amount I can contribute?
The annual household dependent day care FSA maximum is $5,000 per family ($2,500 if you are married and filing separate Federal income tax returns).
Note: Each year FSA plans must pass a non-discrimination test to show they do not favor highly compensated employees regarding eligibility, contributions and benefits. If Stanford’s FSA plans do not pass the test, Stanford may reduce your election(s) during the year if you are a highly compensated employee as defined by the Internal Revenue Code. Stanford Benefits will notify you if it becomes necessary to reduce your contributions.
Are there any advantages of using a dependent day care FSA versus the Child Care Credit on my federal income tax return?
IRS Publication 503 can help you determine whether using a FSA or filing for the Child Care Credit on your tax return is most advantageous to you. The IRS will not allow you to receive two tax breaks for the same expenses. In addition, depending on your situation, you may be required to file additional forms such as Form 2441. For further guidance, please consult your tax advisor.
I participate in the Stanford Child Care Subsidy Grant program. How does that affect my dependent day care FSA?
Stanford’s Child Care Subsidy Grant (CCSG) is simply a Stanford contribution to your dependent day care FSA. During Open Enrollment, you must log into MyBenefits and indicate your acceptance of the CCSG award by checking the appropriate box online. This action will automatically enroll you in a dependent day care FSA for the following calendar year. Once the CCSG money is in your dependent day care FSA, you use it as if you had contributed the money and file claims for reimbursement of your dependent day care expenses.
Remember, you forfeit any unclaimed funds at the end of the plan year unless you submit claims by the April 30 deadline.
Please refer to the WorkLife website for additional information about the Child Care Subsidy Grant Program.
Filing a Claim and Receiving Reimbursement
How am I reimbursed?
You are reimbursed from your FSA by submitting a claim online, using the FSA debit card, using the Mobile App, or completing a Request for Reimbursement (RFR) form .
Your entire health care FSA annual contribution is immediately available to reimburse eligible health care expenses. However, reimbursement from your dependent day care FSA is limited to the amount in the account at the time a claim is submitted.
How do I file claims?
You will submit your health care FSA or dependent day care FSA claims to Benesyst. You can:
- Enter your Request for Reimbursement online. Login to partners.benesyst.net/stanford and click the blue Spending Accounts button, then click Request for Reimbursement. Enter all the required information and upload your scanned itemized receipts. Each expense incurred must be sumitted individually. Review your request carefully and correct any errors then click Submit.
- Enter claim information via the Benesyst mobile app.
- Complete a Request for Reimbursement (RFR) form. Login to partners.benesyst.net/stanford and click the blue Spending Accounts button, then click Download Reimbursment Request Form from the Participant Manager menu. Complete the form and fax it to the fax number on the form.
- Text information via Two-Way Text Messaging.
For questions about how to submit a claim, please contact Benesyst Customer Care 855-842-4913 Monday-Friday 8AM-5PM.
When I submit a claim, or if I have to provide substantiation for a debit card reimbursement, what can I use as proof of payment?
You can use an itemized bill and your medical, dental or vision plan’s Explanation of Benefits. The IRS does not allow cancelled checks, credit card statements or balance-due statements as supporting documentation with your claim form.
When do I need to provide a Letter of Medical Necessity from my doctor?
Under Internal Revenue Code Section 213(d) (1), only expenses needed to treat, alleviate or prevent certain medical conditions can be reimbursed from your health care FSA.
In certain circumstances, services/items could be considered “dual purpose” items. These are services/items that are generally known to be used for both a medical condition and for personal, general well-being or cosmetic reasons. These dual-purpose services/items qualify for reimbursement under a health care FSA only if your doctor provides a Letter of Medical Necessity that certifies the expense is necessary to treat a medical condition. The following are examples of (but not limited to) dual-purpose expenses that require a Letter of Medical Necessity:
- Counseling: Counseling, psychoanalysis or similar therapy must be for the treatment of a specific medical condition and not for the general improvement of mental health, relief of stress or personal improvement.
- Note: Marriage counseling does not qualify for reimbursement.
- Massage therapy: A massage must be for the treatment of a specific injury or trauma and not for general well-being.
- Cosmetic surgery or other items: Items or procedures directed at improving a patient's appearance that do not meaningfully promote the proper function of the body or prevent or treat illness or disease are not allowable. Examples include face lifts, hair transplants, hair removal (electrolysis), teeth whitening and liposuction. There is an exception, however, for procedures necessary to ameliorate a deformity arising from a congenital abnormality, personal injury from accident or trauma or a disfiguring disease.
- Vitamin/herbal supplements:These are generally not eligible for reimbursement, unless your doctor or other licensed health care provider certifies the supplement is required to treat a medical condition.
- Note:If the item has a medicinal component to it, a prescription is required (i.e., an over-the-counter (OTC) drug). A prescription is a written or electronic order meeting the legal requirements for a prescription in the state where the expense is incurred. To show that an OTC drug was prescribed, a prescription or other documentation showing that a prescription was issued (e.g., a pharmacist's receipt with the name of the purchaser or patient, the date and amount of the purchase, and an Rx number) is required.
IMPORTANT: Submitting the Letter of Medical Necessity does not guarantee that the expense will be reimbursed.
What information needs to be included in the Letter of Medical Necessity from my doctor?
Prior to submitting your reimbursement request, follow the checklist below to ensure that your doctor’s Letter of Medical Necessity likely meets requirements:
- Must be on the doctor’s or licensed physician’s letterhead
- Your (your spouse’s or dependent’s) specific diagnosis
- Specific treatment/item needed
- How the treatment will treat/alleviate the medical condition
- Frequency and/or dosage (for a prescription)
- Duration of treatment (lifetime or indefinite lengths of treatment will not be approved)
- Name, address and phone number of the doctor or licensed practitioner
- Signature of the doctor or licensed practitioner
The Letter of Medical Necessity will be in effect for up to a maximum of one year (12 consecutive months) from the date on the letter. If treatment extends beyond the time period listed, a new Letter of Medical Necessity covering the new time period will be needed.
When will I receive a payment from the FSA?
Claims for reimbursement are processed daily. Reimbursement monies are payable to you, not to the provider. Your reimbursement will automatically be placed in your MyCash account which is associated with your debit card. If you would like your monies to go into a bank account please provide your banking information when you login and set up your user profile at partners.benesyst.net/stanford. For questions about your claims payment, call Benesyst Customer Care at 855-842-4913 Monday-Friday 8AM-5PM.
Can I set up direct deposit for reimbursements?
Yes. Login to partners.benesyst.net/stanford and click the Manage My Profile link in the upper right corner, then click the blue Flex Direct Deposit button and update or enter your direct deposit information.
Other Important Information
What happens to my FSAs if I take a leave of absence?
Your options depend on whether or not your leave is paid or unpaid.
If you are on a paid leave of absence, you cannot cancel your health care FSA. It stays in place and works just as if you were still at work. Payroll deductions continue, and you can submit any claims that occur while you are on your leave.
If you have a dependent day care FSA, it will be frozen while you are on your leave. You cannot contribute to your account or submit any claims that you incur during your leave. When you return from leave, your account will be reinstated and your contributions will be adjusted so you meet your original election amount by the end of the year.
If you go on an unpaid leave, then you have the option of continuing your health care FSA or canceling it.
If you decide to continue your health care FSA, you will be billed on an after-tax basis for your contributions. Your account will work the same as if you are not on leave, and you can submit any claims that occur during your leave.
If you decide to cancel your account, you must do so within 31 days from the start of your leave. You cannot submit any claims that you incur while you are on leave. When you return from your leave, you will be offered the opportunity to elect coverage again.
Your dependent day care FSA will be frozen. (See explanation under Paid Leave.)
If you use the federal income tax deduction, you must spend a certain percentage of your gross income in order to claim the deduction. Remember, any expenses reimbursed from your Flexible Spending Account cannot be deducted for federal income tax.
Can I continue using my FSA when I leave Stanford?
Please refer to the document When Employment Ends: Your Flexible Spending Account located in the Resource Library.