Health Care Flexible Spending Account (FSA)

What Is a Healthcare Flexible Spending Account (FSA)?

Under both a (general purpose) FSA as well as a Limited Purpose FSA, you may set aside pre-tax dollars to pay for out-of-pocket healthcare expenses. The general purpose FSA may be used for non-reimbursed medical, dental, and vision expenses such as copayments, prescriptions, etc. Krapf also offers a Limited-Purpose Health Care FSA. This account should be elected instead of the general purpose Medical FSA if you enroll in the HDHP HSA medical plan. This account may only be used to pay for eligible dental and vision expenses with pre-tax dollars incurred by you or your family members that are not reimbursed by any other source. Under both accounts, the full annual election amount is available on your effective date.

How Do These Spending Accounts Work?

The amount you elect is deducted from your paycheck and stored in your account until you need it. You can request reimbursement by using your debit card at the time of purchase, filing your claims online, or submitting paper claims along with your receipts to Paylocity. A check will be sent to you for expenses you have incurred and paid out-of-pocket.

For plan year January 1, 2025 – December 31, 2025 you may contribute up to $2,000 in your healthcare account and $5,000 (household limit) in your dependent care account.

You cannot change your contribution amounts outside of open enrollment unless you have a qualified life event.

Employees have 2½ months after the end of the plan (until 3/15/26) year to incur eligible expenses. This grace period applies to the Healthcare and Dependent Care FSA only. There is also a 90-day run out period at the end of the plan year (until 3/31/26) during which you can submit claims for qualified expenses incurred during the plan year. Remaining unused funds will be forfeited.

For plan year January 1, 2026 – December 31, 2026 you may contribute up to $2,000 in your healthcare account and $7,500 (household limit) in your dependent care account.

You cannot change your contribution amounts outside of open enrollment unless you have a qualified life event.

Employees have 2½ months after the end of the plan (until 3/15/26) year to incur eligible expenses. This grace period applies to the Healthcare and Dependent Care FSA only. There is also a 90-day run out period at the end of the plan year (until 3/31/26) during which you can submit claims for qualified expenses incurred during the plan year. Remaining unused funds will be forfeited.

Note: If you leave the company prior to the end of the plan year and participated in the FSA and did not use all the funds, you will forfeit the unused funds upon termination of employment. You will have a 90-day run out period from your date of termination to submit claims for qualified expenses incurred during the plan year when you were an active employee. Participant’s have the right to COBRA FSA which can retain your balance. The COBRA administrator (Paylocity) has a process to obtain your FSA balance to then determine a rate before sending out the COBRA information.