Flexible Spending Account
Saving for Your Health Care Expenses
The Flexible Spending Account (FSA) allows you to set aside money from your paycheck on a pre-tax basis. K-C offers two FSA options depending on your medical election:
- Limited Use FSA - If you’re enrolled in one of K-C’s CDHP with HSA plan options, in addition to the HSA, you’re eligible to participate in the Limited-Use FSA to pay for eligible dental and vision expenses.
- General Purpose FSA - If you're enrolled in the CDHP with HRA or have no medical coverage with K-C, you can use your General-Purpose FSA dollars to pay for eligible medical, prescription drug, dental, and vision expenses.
When you enroll in a Limited Use or General Purpose FSA, you choose an annual amount to contribute. The amount you elect* is evenly deducted over the course of the year from your paycheck, pre-tax.
- Minimum: $120/year
- Maximum: $2,850/year
*If both you and your spouse contribute to an FSA, consult with a tax advisor to understand how much you can contribute. If you don’t use all of your FSA dollars by December 31, you can carry over up to $550 in this account from year-to-year as long as you’re an active employee. Any unused dollars over $550 are forfeited.
The expenses you can pay for with your FSA depends on whether you have an HSA and is defined by the IRS. For a complete list of eligible expenses, review IRS Publication 502. These lists are subject to change at any time and vary based on whether your account is classified as Limited Use or General Purpose.
Compare the HSA and Limited Use FSA
Enrollment in a Health Savings Account (HSA) is automatic when you enroll in the CDHP Blue or Green. However, you may consider also enrolling in a Limited Use FSA if for example, you're contributing the maximum to your HSA or if you anticipate a year of high dental or vision expenses for which you don't want to use your HSA savings.
Use the chart below to understand how the Limited Use FSA is different from the HSA.
|HSA||Limited Use FSA|
|Set Up||A savings account that is automatically set up for you when you enroll in a CDHP with HSA.||A spending account that you can elect to contribute to.|
|Eligible Expenses||You can use your HSA dollars on all of your medical, dental, and vision expenses.||You can only use your Limited Use FSA dollars on dental and vision expenses—not medical expenses.|
|Tax Implications||Allows you to set money aside tax-free.||Allows you to set money aside tax-free.|
|Deadline||No time limit to use your HSA dollars—they're yours to keep even if you leave K-C.||You have until December 31 to incur eligible expenses against your Limited Use FSA. The deadline to file eligible Limited Use FSA claims is March 31 of the following year.|
|Carryover||There is no carryover as your HSA balance is always yours to keep.||After December 31, anything above $550 is forfeited per IRS rules. Up to $550 is carried over for use next year.|
|Receipts||You don’t have to prove your purchases are eligible but it's recommended you hold on to your receipts in case you’re ever audited by the IRS.||You may have to prove your purchases are eligible by submitting receipts per IRS rules.|
How Other Coverage Outside of K-C Impacts HSA Eligibility
If you’re enrolled in TRICARE, Medicare, or a non-high deductible health plan outside of K-C, the IRS specifies that you cannot contribute to or receive company contributions into an HSA. There are also special eligibility considerations for Veterans Administration benefits. If you're ineligible for an HSA, you'll be offered a CDHP with Health Reimbursement Account (HRA) that meet IRS restrictions. Click here to learn more about HSA eligibility.
Using Your FSA Dollars
You have several convenient options when it comes time to pay for an eligible expense. Regardless of which option(s) you use, always keep your itemized receipts.
Optum Financial Payment Card (formerly ConnectYourCare): When you enroll in the Limited Use or General Purpose FSA, you’ll receive this card that you can use, like a normal credit card, to pay directly for your eligible expenses. Generally, Optum Financial is able to verify eligibility of your expense and no additional action is needed by you, but in some cases an itemized receipt may be required, and Optum Financial will notify you.
Pay a Provider: Use this online feature to request that Optum Financial issue payment directly from your account to your health care provider.
Call Optum Financial 24/7, 365 days a year if you need help using your account or filing claims.
December 31, 2021
Last day to incur eligible expenses for the 2021 Limited Use or General Purpose FSA. If you leave K-C before the end of the year, you have until the end of the month in which your last day of work occurs, unless you elect COBRA, to extend how long you can incur expenses.
March 31, 2022
Last day to file all 2021 Limited Use or General Purpose FSA claims.
What Happened to My FSA Rollover?
Any funds, up to the $550 IRS rollover limit, will automatically be transferred to a Limited Use FSA at year end. Those dollars can be used to help cover out-of-pocket costs for dental and vision expenses in the following year.
Just remember to use any funds in your 2022 Limited Use FSA over the $550 IRS FSA rollover limit before December 31, 2022. Then, be sure to submit all claims by March 31, 2023. Use Optum Financial’s mobile app or go to Optum Financial for details or to submit claims. Call Optum Financial 24/7, 365 at 844-594-1228 if you need help.