FSA: Tax savings for medical costs

Updated February 17, 2021: make 2021 election changes with no qualifying event

If you enrolled in a Medical FSA for 2021, you can change your election without a qualifying event. This opportunity is available three times: in March, June, and September 2021. Elections can be made using Workday. Normal election minimums and maximums still apply.

Payroll deduction changes are effective the following month.

  • Changes submitted in March are effective in April.
  • Changes submitted in June are effective in July.
  • Changes submitted in September are effective in October

Please note that you can only lower your election to the amount you have already contributed or claimed for the year. For example, if you elected $2,000 for your Medical FSA and you have already contributed or claimed $400, you can lower your election only to $400. Remember, the minimum annual election for both Medical FSA is $240.

These opportunities only allow you to change your 2021 annual elections. You cannot enroll in Medical FSA without a qualifying event. If you want to make a change outside of March, June, or September, you must have a qualifying event that creates a special open enrollment.

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 reduces your taxes.

You choose how much of your salary goes into your FSA, a minimum of $240 up to a yearly maximum of $2,750 for 2021. However, you need to choose this amount carefully. FSAs are “use it or lose it” accounts, and you must spend your entire yearly allotment before the end of the grace period — or you’ll lose your money.

Enroll in a Spending Account: Medical FSA

The FSA accounts for UW employees are managed by Navia Benefits Solutions, a local company that administers benefits for organizations.


You’re eligible to enroll in an FSA as long as you’re eligible for PEBB benefits. However, you can’t have an FSA if you’re enrolled in a consumer-directed health plan (CDHP).

You can, though, combine an FSA with the Dependent Care Assistance Program (DCAP), which allows you to set aside pretax earnings for child care and eldercare.

When you can enroll

You may enroll in an FSA at the following times:

  • During your first 31 days of becoming eligible for PEBB benefits
  • During annual open enrollment, from November 1 – 30
  • Within 60 days of a qualifying life event, such as a marriage or birth

If you enroll during the open enrollment period, FSA funds become available on January 1 and your FSA deductions begin on the first paycheck following January 1.

If you enroll due to a qualifying life event, FSA deductions start and funds become available on the first day of the next month.

How to enroll

View the FSA and/or DCAP – Enroll/Change Contribution Amount(s) User Guide and enroll through Workday. Contact the ISC if you have questions.

Re-enroll in FSA each year

FSAs don’t continue automatically. View the Open Enrollment User Guide and re-enroll through Workday each year during open enrollment, November 1 – 30.

How FSAs work

If you’ve never used an FSA before, you simply need to know that it’s a way to pay for health costs while reducing your federal tax obligation. The money deducted from your paycheck and put into the FSA isn’t taxed — you don’t pay Social Security, Medicare, or federal taxes on that money.

This makes routine medical costs cheaper. Medical bills, prescriptions, eye glasses, orthodontia, physical therapy, and many other types of medical products and services not covered by health insurance are eligible FSA expenses.

But before enrolling in an FSA, you need to accurately estimate your medical costs for the calendar year. While you can’t predict all your health costs, many costs — routine dentist visits, for example — are simple to predict using past years as a guide.

Be conservative with your FSA amount if you’re not sure about your costs. You don’t want to have money left over because you’re required to forfeit any unspent funds. And once you enroll, you can’t change your deduction amount until next year (except due to a qualifying life event).

Once you know your FSA amount for the year, you’re ready to enroll. The max amount is $2,750 for 2021 and $240 is the minimum. The amount you elect will be deducted from your paycheck in equal increments throughout the calendar year.

Using your FSA account

Beginning January 1, you can begin using your FSA Debit Card or submit reimbursement claims to start spending your FSA funds on eligible medical expenses. (Newly eligible employees and those who enroll due to a qualifying life event may have a different start date). The full amount of your FSA is available immediately; you don’t have to wait for the paycheck deductions to accumulate to use your FSA.

If you weren’t enrolled in an FSA the prior calendar year, you cannot get reimbursement for any health expenses you incurred before December 31.

If you were enrolled in the FSA for the prior year, you can get reimbursed for health expenses incurred as late as March 15th of the following calendar year.

Eligible medical expenses

FSA funds cover a wide variety of medical expenses. To learn what’s eligible and what’s not, see the list of eligible and ineligible FSA expenses.

FSA debit card

Traditionally with an FSA, you had to submit a claim then wait for your reimbursement. Now you can pay directly using an FSA debit card that works just like any other debit card — you just swipe it or pay online. Of course, you can use it only for qualified expenses and only at valid merchants. But it makes FSAs a lot more convenient: learn more about the Navia benefits card.

Submit a claim for reimbursement

If you incur a medical expense and can’t use the FSA debit card to pay for it, you have several options for submitting a reimbursement claim. Claims are processed by Navia, and you can submit a claim through your online profile, using the MyNavia mobile app, by sending an email, or by mailing a completed claim form.

If you have other questions about how claims work, see Navia frequently asked questions or contact Navia directly.

Deadline for spending FSA funds

Each year you must use all the funds you’ve allotted to your FSA. Otherwise, you’ll lose your money. The state doesn’t want you to forfeit your money, so when the year’s over, you get a grace period. At the end of the calendar year:

  • You have until March 15 of the following year to receive reimbursable services
  • You have until March 31 of the following year to submit any claims to Navia for reimbursement

Qualifying life events for changes or special enrollment

During annual open enrollment, any eligible employee can enroll or re-enroll in an FSA and change their FSA amount for the forthcoming year. To make changes during other times of the year or to enroll during other times of the year, you must experience a qualifying life event.

Once the event occurs, you have 60 days to make a change or enroll. View the FSA and/or DCAP – Enroll/Change Contribution Amount(s) User Guide and make changes through Workday.

Events that qualify include:

  • Marriage or domestic partner registration
  • Divorce or dissolved partnership
  • Birth or adoption
  • Change in employment status
  • Change in a child’s eligibility
  • Loss of other health insurance coverage
  • Legal custody or guardianship of a child
  • Disability of a child
  • Court order that requires a child to be covered
  • Medicaid, Medicare, or CHIP coverage changes

If you’re unsure whether or not an event qualifies, contact Navia Benefit Solutions. Events that qualify are defined by the state in the Washington Administrative Code 182-08-199.