Flexible Spending Accounts

A Flexible Spending Account (FSA) is a program that permits benefit eligible employees to pay for unreimbursed eligible medical, dental, vision care, and/or dependent care expenses with pre-tax dollars through payroll deduction. The money deposited into these accounts is not taxed at the time of contribution, and remains tax-free when it is withdrawn as reimbursement for eligible expenses. If an employee wishes to take advantage of a FSA each year, they must renew the account during the open enrollment period.

Employees can enroll in either or both of the Health Care Flexible Spending Account (HCFSA) and/or Day Care Flexible Spending Account (DCFSA). Dollars deposited in these accounts are kept separate and cannot be transferred from one account to the other. Both accounts are administered by Navia Benefits Solutions and if the participating employee registers on the Navia website they can track the activity of their account online.

Once a FSA account has been opened, the employee is committed to that decision for the plan year. The only exception is when the employee has an IRS qualified Change in Status or Life Event unless additional flexibility is allowed by the IRS due to a national emergency.

Here’s how flexible spending accounts work:

1. Estimate your eligible expenses for the upcoming plan year (health care and/or day care).
2. Determine how much you want to have set aside from your pay to go into our FSA to pay for your eligible expenses for the coming plan year (this amount is called your “election”).
3. The money you elect for your FSA will be automatically deducted from your paycheck on a pre-tax basis and credited to your FSA.
4. When you have an eligible expense, you can submit a claim to be reimbursed from your FSA. Your full amount of your Health Care FSA annual election will be available upon enrollment; however, Day Care elections are only available for reimbursement as the account is funded throughout the year.

When you enroll in the FSA, you elect the amount you want withheld from each paycheck, up to the maximum amount per pay period for each of the Health Care FSA and Daycare FSA.

If your agency processes payroll on the State’s semi-monthly basis, you will have 24 payroll cycles, bi-weekly payroll (26 payroll cycles) or monthly payroll (12 payroll cycles).

Your annual election will include a $2.70 administration fee which will be deducted from your election balance each month.

If your agency processes payroll on a different schedule, consult your agency’s human resource office for payroll schedules and maximum election amounts.

When you enroll in the Health Care FSA, you will automatically be issued a Navia Benefit Card. There is no cost for the initial card.

You must provide a valid email address to use the card.

The cards are valid for 3 year periods; if you’ve previously received a card then it will be reloaded with your new election.

Yes, you can set up a reoccurring claim on the Navia member portal for all future claims. Reoccurring claims that include past dates will need to be submitted by email, FAX or USPS.

Day Care FSA Grace Period

• The grace period allows you to incur Day Care FSA expenses against the prior plan year through September 15^th after the plan year ends. Day Care FSA expenses incurred after the end of the Grace Period are not eligible for reimbursement.

Health Care FSA and Limited Purpose Health Care FSA Roll Over (FY25)

• Unused Health Care FSA balances up to $610 will be rolled over to the 7/1/2024 – 6/30/2025 plan year.  At the end of 6/30/2025 you will be able to roll over $640 to the 7/1/2025 plan year. Any Health Care FSA funds in excess of said limits will be forfeited.
• When an employee has not elected to contribute new funds to the FSA in the coming plan year, accounts with a rollover balance, up to a maximum of $640, will continue to be accessed the monthly administrative fee, but the employee does not have to re-enroll in the FSA to continue to utilize the remaining funds.

Once an FSA account has been opened, the employee is committed to that decision for the plan year, unless the employee has an IRS qualified Change in Status or Life Event (e.g., marriage, divorce, or the birth of a child) or additional flexibility is allowed by the IRS due to a national emergency.

For example:

• if you adopt a baby, you may want to increase your HCFSA or DCFSA elections because of added medical expenses and/or daycare costs you may incur for this adopted child. However, in general, you could not decrease your DCFSA elections for that Life Event.
• if your spouse decides to stay home with your child and you no longer have eligible daycare costs, you may wish to decrease your DCFSA election. In this case the Change in Status would be a change in cost or coverage of daycare.

With an FSA, the money you set aside to pay for health care and/or day care expenses come out of you salary before taxes are withheld. This reduces your taxable income, and consequently, your tax liability. You pay for you eligible expenses with tax-free money from your FSA.