Health Care Flexible Spending Accounts

Health Care Flexible Spending Accounts

A Health Care Flexible Spending Account (HCFSA) helps employees save money on taxes by paying for eligible out-of-pocket medical, dental, vision and other qualifying expenses for the employee and their eligible dependents with pre-tax dollars. 

Employer payroll units deduct an employee's annual contribution amounts (in equal portions) from each paycheck throughout the plan year. However, an employee's entire annual election amount is available on the first day of the plan year or the day benefits become effective. 

HCFSA Details by Year

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Amount an Employee Can Contribute: $120–$3,200

Rollover Maximum for 2026: $640 (with at least $25 in your account)

Expenses Must Be Incurred: January 1–December 31, 2025

Deadline to Submit Claims for Reimbursement: March 31, 2026

Amount an Employee Can Contribute: $120–$3,050

Rollover Maximum for 2025: $610 (with at least $25 in your account)

Expenses Must Be Incurred: January 1–December 31, 2024

Deadline to Submit Claims for Reimbursement: March 31, 2025

Plan Details

Eligible and Ineligible Expenses

Below are some of the most frequently asked about expenses that you can or cannot use your HCFSA to pay for. The IRS defines all eligible expenses in a comprehensive publication, or you can find more common expenses here. Note that some health care expenses may require a letter of medical necessity written by an authorizing physician.

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  • Deductible(s) and copayments for your health plan or qualifying relative's plan. 
  • Coinsurance for any medical or dental bills after the deductible is met.
  • Any amounts you're required to pay after reaching the maximum benefit under a medical or dental plan. 
  • Over-the-counter medicines—no prescription needed. Vitamins and supplements are not included in over-the-counter medications, but may be covered with a physician's prescription.
  • Additional common expenses including, but not limited to:
    • Dental expenses
    • Hearing aid and its batteries
    • Infertility treatment
    • Menstrual items
    • Insulin and diabetic supplies
    • Mileage ($0.21 per mile for 2025) to/from medical provider's office for treatment. Find up-to-date rates at irs.gov.
    • Orthodontia
    • Prescription drugs
    • Refractive surgery (RK, PRK, LASIK)
    • Smoking cessation programs
    • Medical supplies
    • Tuition at a special school or specially trained tutor for disabled children
    • Vision expenses (exams, glasses, frames)
    • Weight reduction program (prescribed by doctor to alleviate a diagnosed medical condition or obesity). Plan food is not covered. 
    • Personal care items such as sunscreen (SPF 15+), bandages, shoe insoles, inserts and cushioning

  • Medical, dental and other premiums cannot be reimbursed. 
  • Vitamins and supplements, unless prescribed by a physician.
  • Cosmetic procedures that are not to correct a congenital deformity or disfigurement due to an accident or disease.
  • Dental procedures to whiten teeth.
  • Weight loss programs, unless prescribed by a doctor to alleviate a diagnosed medical condition or obesity. 

Frequently Ask Questions About HCFSAs

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Each year the IRS defines a maximum rollover amount. As long as you have a minimum balance of $25 in your account, you can carry this maximum rollover forward into the next plan year even if you do not re-enroll in an HCFSA.

You have until the end of the runout period—March 31 after the end of the plan year—to file claims to use funds over the maximum rollover amount. If not used, any funds over the maximum will be lost.   

When checking your HCFSA account, your rollover will be a separate line item from your current year account with Health FSA Carryforward Acct. in the title.

If you re-enroll in an HCFSA, your expenses will come out of your that plan year's total contribution first. If your current plan year funds are depleted or you do not re-enroll, rollover funds will be available after the runout period. As a result, your NCFlex Convenience Card will not pull funds from a carry forward account until April 1. For any expenses incurred January 1–March 31, you can file claims after the runout period and your rollover will be retroactively applied.

At the end of a plan year, funds in your current year account and your carry forward account will be combined in consideration for rollover for the next year.

Note: Funds in your account for the current plan year cannot be used to pay for expenses for the prior year

If an employee is enrolled in the HCFSA, their spouse cannot make or receive tax-favored Health Savings Account (HSA) contributions. 

This is because the HCFSA is available to reimburse your qualified expenses and those of your spouse and dependents, so your spouses contributions to an HSA would violate IRS rules. 

Contributions that are made by or on behalf of an individual who is HSA-eligible are considered "excess contributions" and a six percent excise tax is imposed on the HSA owner for all excess contributions. 

The HCFSA is based on current tax laws.

Plan participation may affect future Social Security retirement benefits. This could happen if your taxable pay is below the Social Security Taxable Wage Base after spending account contributions are taken out. For most employees, the immediate tax savings is of far greater benefits than the longterm impact on Social Security benefits. 

Participation in the plan will not affect the amount employees my contribute to a 401(k), 403(b) or 457 retirement plan. 

An employee cannot claim the same expenses through the HCFSA and on their tax return. Currently, only health care expenses over 10 percent of your adjusted gross income are deductible for income tax purposes. But with the HCFSA, you can save taxes immediately on the very first dollar not reimbursed by the health care plan. 

  1. Log into your FSA account one of three ways: 
  2. You can also call P&A Group to check your balance, at 866-916-3475. 
  3. For the Health Care FSA, view your “Available Funds” in both your FSA and CRYFRWD accounts, add the two numbers together. 

    • For 2024 going into 2025, anything from $25 - $610 (combined from both accounts) can roll into 2025. Anything over $610 will be lost if claims are not filed for 2024 expenses by March 31, 2025.

       

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