Changes Coming to FSA's

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By on November 5, 2012 in Current Events, Human Resources with 13 Comments

Flexible Spending Accounts (FSAs) are one of the more recent additions to federal benefits.  Yes, they’ve been around a decade or so, but that is relatively “new” in the world of federal benefits.  They allow us to set aside pre-tax money to pay unreimbursed health care and dependent care expenses.

There have been some changes in FSAs in the past (i.e., requiring a doctor’s prescription for over the counter drugs), and a major new change is coming in 2013.  As part of the implementation of the Affordable Care Act (or ObamaCare), the amount that can be set aside in a health care FSA will be reduced to $2,500 and will be increased each subsequent year by inflation.  There will be no change in the $5,000 that can be set aside in a dependent care FSA.

Another item regarding FSAs that bears mentioning is that any expenses incurred after an employee has left federal service (either by retiring or resigning) cannot be reimbursed, even if the employee had money in the account.  Those planning on leaving federal service should pay extra attention to their FSA so that they do not leave money on the table in the year in which they leave.

Agencies can request to have John Grobe, or another of Federal Career Experts' qualified instructors, deliver a retirement or transition seminar to their employees. FCE instructors are not financial advisers and will not sell or recommend financial products to class participants. Agency Benefits Officers can contact John Grobe at [email protected] to discuss schedules and costs.

© 2017 John Grobe. All rights reserved. This article may not be reproduced without express written consent from John Grobe.

About the Author

John Grobe is President of Federal Career Experts, a consulting firm that specializes in federal retirement and career transition issues. He is also affiliated with TSP Safety Net. John retired from federal service after 25 years of progressively more responsible human resources positions. He is the author of Understanding the Federal Retirement Systems and Career Transition: A Guide for Federal Employees, both published by the Federal Management Institute. Federal Career Experts provides pre-retirement seminars for a wide variety of federal agencies.