FSA must be sponsored by an employer and there are many variables the employer needs to select when setting up an FSA for their employees.

Below are the key variables an employer can select

Does your employer support Healthcare FSA

Healthcare FSA is different than Daycare or other FSAs. So you need to ensure your company enables it for it’s employees. You also need to check which FSA provider is providing this benefit (it’s likely to be different than your insurance provider)

When does your benefit year start?

Benefit year don’t have to align with the calendar year and it’s important for you to know the annual start date so you know what’s the last day for you to make an eligible purchase

Does your company support rollover or grace period or neither

Rollover allows you to transfer funds to the next year. The rollover amount varies but cannot exceed 20% of the max allowed contribution. For 2024 the max roll over amount is $640.

Grace Period allows you to make purchases up to 2.5 months after the benefit year ended. if it’s enabled, please check how long is your company’s grace period

Companies cannot enable both rollover and grace period but can decide not to enable either of these.

Does your company allows for a run-out period?

Run-out periods allow you to submit expenses you have made during the eligibility period even after the deadline for using the funds ended. It’s common to have a 90 days run-out period which means that if your deadline for using funds was 12/31/24 you can submit expenses made during 2024 all the way to 03/30/25