Personal Finance (Not Investing) • Spouse still has an FSA balance this year, even though she canceled it. HSA implications?

If the money in the FSA was available to spend then you were not HSA eligible. Just because it was canceled doesn't mean you lost the ability to spend it down. You need to confirm this detail.

Sounds like the document says she can only be reimbursed from expenses before it was cancelled.

And until she can no longer reimburse from the FSA he is ineligible. If that is today then he is ineligible for each month from when they were married until now.

They lost the ability to reimburse by July. That is a standard grace period on an FSA. The IRS publication addresses the FSA grace period, but it’s confusing.

https://www.irs.gov/pub/irs-pdf/p969.pdf

See Health FSA Grace Period on page 5

But in the Thompson Reuters document I posted above, whether he can be reimbursed (rather than his spouse) is relevant. If she had submitted a prescription in June that he filled in March, it would have been declined?

Grace periods started from the end of the plan year (normally end of the year) and go usually 2.5 months into thr next year. Not sure that applies to the OPs situation for terminating a FSA. I think FSA funds can be available thru the end of the plan year even if terminated. But it is a very easy question for the OP to get answered. They could just try to get an expense reimbursed in the system.

Statistics: Posted by lazynovice — Wed Dec 20, 2023 12:13 am — Replies 22 — Views 766