If my employer elects to use the carryover option, do I have to carry over the full $640?

No. Although the maximum amount allowed to be carried over in any Plan Year is $640, your plan may allow for a lower amount. Contact Surency’s Customer Service department at 866-818-8805 to discuss the specific details of your plan.  

What happens to the $640 carryover if I do not re-enroll in the plan for the next Plan Year?

Even if you do not re-enroll, the amount set to carryover may create an automatic enrollment for the following Plan Year. Please contact Surency’s Customer Service department at 866-818-8805 to discuss the specific details of your plan.  

Does the carryover count against the annual contribution limit or employer contributions?

The carryover does not count against or otherwise affect the contribution limit applicable to each Plan Year. For example, if a participant carried over the maximum $640, and elected $2,600 in the following plan year, $3,240 would be available for use in the following plan year. In addition, employer contributions to your FSA are not impacted by either the annual contribution limit or the carryover.

Can the $640 be used for expenses incurred during the prior Plan Year or expenses incurred in the new Plan Year? Or both?

Both. The carryover of up to $640 may be used for eligible medical expenses incurred during the prior Plan Year, from which the funds were carried over, or the entire new Plan Year, to which the funds are carried over.

For this purpose, the carryover amount is the amount remaining after medical expenses have been reimbursed at the end of the plan’s run-out period for the Plan Year.

NOTE: A “run-out period” is the time immediately following the end of a Plan Year during which a participant can submit a claim for reimbursement of expenses incurred for eligible expenses during the Plan Year.

My employer previously offered a grace period and has elected to terminate the grace period and implement the $640 carryover option. What does this mean for me?

An FSA can offer either the grace period or the carryover option, not both. If your employer changed to the carryover option, be sure enough expenses are incurred within the 12 month Plan Year so that no more than $640 remains in your FSA at the end of each plan year. Amounts over $640 will be forfeited.

Year-End Plan Options

Grace Period/Run-out Period/Rollover Option:

Run-out Period: This is an additional period of time during which you are allowed to file claims for expenses incurred during your previous Plan Year.

Rollover Option (aka Carryover Option): If your plan has a rollover option, at the end of the Plan Year unused funds (up to $640) will rollover into your FSA account for the next Plan Year.  

Grace Period: This is the time between the last day of the Plan Year and the Final Date to Incur Claims (final date to use your FSA funds). The grace period gives you a little extra time to use the money from your FSA.

What happens if I terminate employment during the Plan Year?

You will have an additional amount of time called a “run-out period” after termination to submit claims for reimbursement. However, you will only be reimbursed for services you received while you were employed (unless you continue to contribute to your FSA through COBRA).

What happens if I submit a claim for an amount greater than what I have in my FSA at the time?

If you file a claim for an amount greater than what is in your account, you will still be reimbursed (up to the total amount elected for the plan year). Deductions from your paycheck will continue to be deposited into your FSA to make up the difference. You are allowed to submit claims for reimbursement up to the total amount you set aside for the Plan Year. 

Can I be reimbursed for my spouse’s deductible, copays or other out-of-pocket medical expenses?

Yes, your Health Care FSA dollars can be used to reimburse qualifying out-of-pocket medical expenses (not covered by insurance or any other plan) incurred by: yourself, your spouse, your dependent children (under age 27 as of the end of the employee's taxable year), and your qualified relatives (as defined in your group’s Plan Document).