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Can I change my FSA annual contribution?

Yes, you can change your annual contribution to a flexible spending account (FSA). But there are limitations regarding when you can do it — and what a “qualifying event” is.

There are two times when you can change FSA contributions: 

  1. During the annual open enrollment period for your FSA plan

  2. Anytime during your plan year if you experience a “qualifying event”

Deciding how much to contribute to your FSA isn’t always an easy task. There are many things to consider when choosing your contribution amount, like your current health and potential changes that may affect how much/little money you’ll need over the next year. 

While changing your FSA contribution mid-year is not easy, it’s not impossible. Read more to learn how FSA contributions work and how to change your contribution both during and after the enrollment period.

How FSA contributions work

Flexible spending arrangements are offered to you by your employer. The account allows you to contribute or add money that you can use for eligible health-related expenses later on.

One perk of an FSA is that you don’t have to pay taxes on the money you contribute. Additionally, you are not required to have insurance coverage in order to have an FSA. As long as your employer offers an FSA, you are eligible.

Contributions to your FSA are determined by how much money you choose to have withheld from your pay. 

When you opt in for an FSA, you can choose how you want the funds added to the account: You can add the maximum amount of money into the account in one lump sum, or you can have a smaller amount taken from each paycheck. Making these decisions is what determines your FSA contribution.

It’s important to note that you must elect to participate in an FSA. Just because your employer offers it does not mean you’re automatically enrolled. 

Depending on your employer, they may offer a contribution match up to a certain amount, or they might choose to contribute a set amount to each employee FSA. While this is common, it is not required of your employer.

SEE RELATED: FSA/HSA insurance premiums 

How to change your FSA contribution

Enrolling in an FSA and deciding your contribution details happens during open enrollment season. Open enrollment is an annual event that begins November 1 and goes through December 15. During this time, you have the freedom to choose and change your contribution preferences as often as you want. 

Once the open enrollment window has closed, the contribution choices you selected are final and will go into effect on January 1. They will be in place until open enrollment the following year.

A few important bits of information to note:

  • You are required to enroll for an FSA and reestablish your contribution preferences during open enrollment every year. Your participation and elections do not automatically renew, so be sure to re-enroll to take advantage of your FSA benefits each year.

  • What may be considered a downside to an FSA is that not all FSA plans allow contribution rollover to the next plan year. For this reason, when it comes to funding your FSA account, more is not necessarily “better.” 

It’s wise to assess your personal health needs and determine how much you think you’ll need for the year. Over-contributing may leave you scrambling for a way to spend those FSA dollars, or worse, losing the money altogether.

SEE RELATED: Availability of FSA dollars

Changing your FSA election mid year

Typically, the contribution details elected during open enrollment are in place for the plan year. However, there are certain circumstances, called “qualifying life events,” that may allow you to change your contribution elections outside of open enrollment.

The Internal Revenue Service (IRS) requires that any contribution changes made outside open enrollment coincide with an eligible change in status as a result of a qualifying event. The most common qualifying events include:

  • A change in marital status (marriage, divorce or death of a spouse)

  • The birth or adoption of a child

  • A change in employment

  • A change of residence 

All changes must follow IRS guidelines and require supporting documentation.

If you qualify under any of the circumstances above and need to change your contributions mid year, it’s important to speak with your benefits administrator. They can work with you on your individual case and ensure that any qualifying contribution changes are made.

And keep in mind, not all employers allow changes to FSA contributions outside open enrollment, even in the event of one of these qualifying events. Talk to your account administrator within 30 days of your qualifying event to confirm whether you're allowed to make any changes.

FSA contribution limits 2021

The maximum FSA contribution limit for 2021 is $2,750 per individual. If you’re married and your spouse also has an FSA, they too can contribute up to $2,750 in their own account.

According to the United States Office of Personnel Management, the minimum amount an individual can contribute to an FSA is $100. This amount has been in place as the minimum contribution since 2015.

READ MORE: FSA reimbursement

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Gary Heiting, OD

Gary Heiting, OD, is a former senior editor of AllAboutVision.com. Dr. Heiting has more than 30 years of experience as an eye care provider, health educator and consultant to the eyewear ... Read more