Benefits

Flexible Spending Arrangement (FSA): Tax savings for medical costs

A flexible spending arrangement (FSA) allows you to set aside a portion of your salary and use the money to pay for medical costs such as deductibles, prescriptions, coinsurance, dentist visits, vision care, and other expenses not covered by health insurance. You can use the funds on yourself, your spouse, and your children. The primary benefit of having an FSA is that it can reduce your taxable salary.

You cannot enroll in a Limited Purpose FSA and a Medical FSA in the same year, nor a Medical FSA and a Health Savings Account (HSA).

How do I enroll?

You can set up a FSA account:

  1. No later than 31 days after the date you become eligible for PEBB benefits.
  2. During annual open enrollment in Workday.
  3. No later than 60 days after you or an eligible family member has a qualifying event that creates a special open enrollment.

Re-enroll in FSA each year

FSAs don’t continue automatically. You must re-enroll through Workday each year during Open Enrollment.

How much can I contribute?

You can contribute a minimum annual amount of $120, up to a maximum annual amount of $3,200 in 2025. In 2026 the maximum will increase to $3,400.

To figure out how much you want to contribute, estimate your medical, dental and vision expenses for the plan year (January 1 through December 31) and enroll in a FSA for that amount. Divide that amount by the number of paychecks you will receive that year to find out how much will be deducted each pay period.

For more help, use the Navia Benefit Solutions Tax Savings Calculator.

How do I submit claims?

When you incur an eligible expense, you can submit a claim online, use the mobile app, or send a claim form by fax, mail, or email to request reimbursement. You also can sign up for a debit card.

You can begin submitting reimbursement claims for eligible expenses on or after the first day of your plan year, January 1. The full amount you set aside for your FSA contribution is available on the first day of the plan year for expenses. You may submit claims for services as often as you like, but not until after the services have been provided.

You have from January 1 through December 31 to use your FSA funds.

If you have not spent all the funds in your FSA by December 31, and you are still employed and didn’t lose eligibility for the FSA, you may have certain unspent funds “carry over” into the following year without affecting annual maximums.

To be eligible for the automatic carryover:

  • You must enroll in either the Limited Purpose FSA or Medical FSA for the following year, or
  • Have at least $120 left in your FSA balance.

Unused 2025 funds up to $640 will carryover to the 2026 plan year. Any funds above $640 will be forfeited. In 2026 the carryover will increase to $660 for unused funds carrying into 2027.

What happens to my funds when coverage ends?

When your PEBB insurance coverage ends, or you go on unpaid leave that is not approved under the Family and Medical Leave Act (FMLA) or military leave, you are no longer eligible to contribute to your FSA. Eligibility ends on the last day of the month you lose coverage or go on leave that is not FMLA or military leave.

You will be able to claim expenses that were incurred only while you were employed, unless you are eligible to continue your FSA under PEBB Continuation Coverage. You must submit claims for reimbursement by March 31 the following year.