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What is the HCFSA Program/Flexible Spending Account and how can it help with medical expenses? What is this?

The HCFSA is a flexible spending account for health care expenses. Here is how the HCFSA Program works:

First, you contribute before-tax dollars into your HCFSA account via automatic payroll deductions.

Next, in order to receive reimbursement, you must complete and submit an HCFSA program claim form with the following documentation for your non-reimbursed expenses: a receipt from your provider and an Explanation of Benefits (EOB) statement from your health insurance carrier(s) for any medical expenses, as well as an EOB statement for any dental, optical or hearing aid expenses that are not covered by your Welfare Fund (union) coverage.

Once your claim(s) are approved, you will receive a reimbursement check from your HCFSA, or you may elect to receive reimbursement via direct deposit. The amount of your reimbursement is free of federal and FICA taxes.

Enrollment in the HCFSA Program is not automatic. Re-enrollment is required each year by completing an FSA Program Enrollment/Change Form during the annual Open Enrollment Period. The Plan Year begins on Jan. 1 and runs through Dec. 31 of each year.

The annual contribution amount is limited to a minimum of $260 and a maximum of $2,650 (including an annual administrative fee no greater than $48).

Claims for OTC drugs must include itemized receipts showing the dates of purchase, drug names and amounts paid, and they must be accompanied by a prescription from your doctor (except for insulin). In certain situations, the HCFSA program may require additional information or documentation.

It is important that you estimate your annual expenses very carefully prior to electing a goal amount for each Plan Year. As mandated by the Internal Revenue Service, money that is not used for reimbursement by the end of the Plan Year, or the end of the Grace Period, is forfeited and cannot be carried forward to the following Plan Year. This is known as the "Use It or Lose It" rule. However, if you have a remaining balance in your Plan Year account at the end of the year, there is an HCFSA Grace Period during which you may submit claims for eligible expenses incurred from Jan. 1 through March 15 of the following calendar year, using any money remaining in your account.

To read more about the HCFSA program, go to the UFT website: