Health Flexible Spending Account Overview
- How to enroll
- Eligible dependents
- Contribution limits
- Eligible expenses
- Over-the-counter drugs
- Filing a claim
- Use it or lose it
- Customer service
- Download HFSA brochure (ben049) [PDF 384K]
You have the option to contribute to the Health Flexible Spending Account (HFSA) through pretax payroll deductions. HFSAs are regulated by the Internal Revenue Code. This allows you to use pretax dollars for reimbursement of health expenses incurred by you and your eligible dependents which are not paid under any other health plan or policy. These accounts are also referred to by the IRS as Flexible Spending Arrangements (FSA).
Use the Payroll Deduction Worksheet (XLS 63K)
How to Enroll
You may enroll in HFSA when you begin employment or during open enrollment. The benefit year for 2013 is July 1 to December 31, 2013. Beginning January 1, 2014, the benefit year will be on a calendar year basis.
Your eligible dependents include anyone you claim as a dependent for federal income tax purposes.
Your total annual contributions, less reimbursements already made to you, are available for your use even though you may not yet have made sufficient contributions to cover a claim. For example, you elect to make monthly contributions of $100, for an annual total of $1,200. By the end of September, you have contributed $300 to your account. In October, you incur $500 in expenses and file a HFSA claim. You will be reimbursed $500 for this expense, even though you have not yet contributed sufficient money. During the rest of the benefit year, you can be reimbursed for additional expenses up to $700 ($1,200 - $500 = $700).
Reimbursements are payable to you, not to your provider. You may sign up for direct deposit of your HFSA reimbursements.
Claims for services incurred during the benefit year will be accepted any time during that year. You have a 90-day grace period (until March 31) to file all unpaid claims for that benefit year.
IRS regulations require qualified expenses be incurred prior to reimbursement. Expenses are incurred when a service is provided, not when you are billed, charged, or pay for a service.
Eligible expenses must meet the Internal Revenue Service definition under IRC 213(d) for medical care expenses and must not be covered or paid in full by your health plan(s). The final determination for eligibility is made by the Plan.
A complete list of tax deductible medical expenses is available in IRS publication #502. You will find it online at www.irs.gov/publications .
Most eligible services or supplies must be prescribed and/or performed by a licensed provider. Only those expenses which are not paid by any of your health plans are eligible to be reimbursed.
Effective January 1, 2011, OTC drugs and medicines may be reimbursed from your HFSA only if the claim is accompanied by a written prescription from a healthcare provider who is licensed to prescribe drugs.
Certain items are exempt from this requirement including:
- Co-pays and deductibles
- Items that are not drugs or medicines
- Medical equipment such as crutches
- Medical supplies such as bandages
- Diagnostic devices such as blood sugar test kits
Please note that certain items such as homeopathic medicines or vitamins require a certificate of need or similar documentation. A list of these items, and those covered under the OTC provision, is included on the HFSA OTC claim form.
Filing a Claim
To be reimbursed for eligible expenses, you must submit the claim to all health plans first. You will receive an explanation of benefits showing your out-of-pocket expenses. Based on the election made when you enrolled in the HFSA, your claims are submitted to the HFSA administrator as follows:
- Streamlined claims submission—with this option, claims are sent to the claims administrator by you or your provider as normal. Any amounts that are unpaid by the health plan, such as deductibles, copayments, uncovered expenses or prescription drug copayments, are automatically processed under your HFSA.
- You cannot elect this option if you or any of your dependents have any other health coverage. This includes a second AlaskaCare plan (such as coverage through your spouse), or any other health insurance plan. For example, a husband and wife who are covered by each other’s health plans may not elect streamlined claims submission.
- Direct claims submission—with this option, you submit claims to the HFSA claim administrator after receiving the explanation of benefits (EOB) from your group health plan(s). You must submit each claim with a completed HFSA claim form, a copy of the original claim, and copies of the EOBs from all health plans. This is the only option available if you or any of your dependents have more than one health plan.
- Over-the-counter (OTC) claims submission—with this option, you submit claims to the HFSA claims administrator regardless of whether you have selected streamlined or direct claims submission. You must submit each claim with itemized statements or receipts, an explanation of benefits form (EOB) from all health plans, and the prescription or certificate of need.
If your situation changes and you need to change how your claims are submitted, please contact the Division of Retirement and Benefits, Benefits section.
Use It or Lose It
IRS regulations require that you forfeit any unused funds in your account at the end of the benefit year (by the end of the 90-day grace period, March 31).
The HFSA administrator is:
- HealthSmart (formerly Wells Fargo TPA)
- P.O. Box 99004
- Anchorage, AK 99509-9004
- Toll-free: (877) 517-6370
View/download HFSA reimbursement forms on the claim forms page.
Use the Payroll Deduction Worksheet [XLS 63K]
Customer service professionals are available Monday through Friday, 4 a.m. to 5 p.m. Alaska Time. They can provide information regarding the status of your account and reimbursements.
BEN049 Rev. 10/11