Healthcare FSA
Authorized by the Internal Revenue Service (IRS), a Healthcare Flexible Spending Account (FSA) allows you to pay for qualifying healthcare expenses with pre-tax dollars. Contributions to this account are directly deducted from your paycheck before federal income or Social Security taxes are withheld, and qualifying reimbursements are also not taxable to you.
Using pre-tax dollars to reimburse yourself for things like healthcare plan deductibles and medical expenses that your healthcare plan does not pay can mean significant savings for you!
How It Works
Once you have met the eligibility requirements established by your employer, you have the opportunity to enroll in the Healthcare FSA. You must re-enroll during the open enrollment period prior to each plan year in order to continue participating. Once you choose to enroll, you will need to:
- Estimate your expected out-of-pocket healthcare expenses for the coming plan year and review what expenses are eligible for reimbursement. You can view our online List of Eligible/Ineligible Expenses or obtain a detailed list from your employer.
- Decide how much you want to contribute to your account up to your employer's maximum contribution limit. The amount you elect to contribute is deducted from your paycheck in equal installments throughout the plan year and deposited in your Healthcare FSA.
- Once enrolled in a Healthcare FSA, you cannot change your payroll deduction amount until the next open enrollment period except when you experience a change in family or employment status like marriage, birth, death, divorce, taking a paid or unpaid leave of absence, termination or commencement of your or your spouse's employment, or a change in hours (such as from full-time to part-time).
- After you incur an eligible expense, you can seek reimbursement from your account.
Eligible & Ineligible Expenses
Your Healthcare FSA can only be used to reimburse qualifying healthcare expenses incurred during the plan year (or during the 2½-month grace period immediately following the plan year if elected by your employer). A healthcare expense is incurred at the time the care or service is furnished and not when you are billed, charged for or pay for the service. The Plan Document, available from your employer, provides an overview of the Healthcare FSA and a detailed listing of eligible and ineligible expenses. You can also download our List of Eligible/Ineligible Expenses.
To qualify, the expenses must:
- Be incurred by you (the eligible employee), your spouse or your eligible dependents
- Not otherwise be reimbursed through a group health plan, other insurance or any other source
- Be considered medically necessary, e.g., for the purpose of treating a medical condition or illness
Receiving Reimbursement
When you incur an eligible healthcare expense, you can apply for a reimbursement from your account in one of two ways:
- Submit to LGC a Healthcare FSA/Dependent Care Reimbursement Account Reimbursement Form obtained from your employer or downloaded from this website.
- Submit your claim securely online by linking to My FSA Account, which is password-protected. Simply follow the site's login instructions for entering required information and scanning, mailing or faxing related receipts.
You must provide copies of all related bills, receipts, explanation of benefits or other written statements. Each receipt must include the following:
- Name and address of the service provider
- Date service/expense was incurred
- Person for whom service/expense was provided
- Detailed description of the service/expense provided
- Amount charged for the service
Please note that cancelled checks are not acceptable as proof of your expense. Mail or fax this information to:
NH Local Government Center
Attn: FSA Reimbursement
PO Box 617
Concord, NH 03302
603.415.3099 (fax)
Incomplete forms may be delayed or returned.
Reimbursement is provided on a weekly basis, and the minimum check amount is $20 unless it is the last claim of the plan year. Healthcare FSA expenses will be reimbursed up to the annual election amount. Reimbursement requests are limited to expenses incurred during the plan year (or during the 2½-month grace period immediately following the plan year if elected by your employer) and may be submitted for up to 90 days after the plan year (or grace period) ends.
If you leave employment during a plan year, you may have the right to elect to continue your Healthcare FSA contributions and have access to your Healthcare FSA balances for the remainder of that plan year, subject to the requirements and limitations set forth under federal COBRA law. Please see the Plan Document or contact either your employer or LGC for further information.
Important Tax Considerations
Keep in mind the following tax considerations when deciding whether to participate in the Healthcare FSA program:
Use-or-lose. IRS regulations stipulate a "use-or-lose" rule that requires employees to use all of their designated Healthcare FSA funds during the plan year (or during the 2½-month grace period immediately following the plan year if elected by your employer), or forfeit remaining balances.
Cannot claim the same expenses as deductions on your income taxes. You cannot receive reimbursement for a qualifying expense through your Healthcare FSA and also deduct the same expense on your federal income taxes. We strongly encourage you to speak with your tax advisor before enrolling in a Healthcare FSA for tax-related questions or concerns.
Reimbursement accounts affect your Social Security earnings. Because you reduce your taxable income by setting aside money in a Healthcare FSA, your Social Security earnings for the year may be reduced. Over time, this may also lessen your overall Social Security benefits. However, the tax savings you will receive now should compensate for those reductions.
Important HSA information. Employees who are enrolled in a Health Savings Account (HSA) either through their employer or a spouse’s employer cannot participate in a traditional Healthcare FSA per IRS regulations. A limited purpose FSA may be available; please contact your employer for further information.
Information About Your Account
For your convenience:- Updated account balances are provided with each reimbursement check.
- A statement of account balance and transaction history is provided 90 days prior to the end of each plan year, or request a statement anytime by calling LGC at 800.527.5001.
Your Healthcare FSA information is available to you 24 hours a day, 7 days a week, by linking to My FSA Account, which is password-protected. You may access transaction information, account balances and account history online.