Questions you might have about FSAs

There are many benefits of an FSA but they also have a lot of rules. Not to worry. We’ll explain them all so you save as much as possible on expenses not usually covered by your medical insurance plan. If you don’t see the answer you’re looking for below, just email us.

May I change my contribution election after the plan year begins?

You may change your contribution election at the beginning of each plan year. You may only change your election during the plan year if you can demonstrate a “change in status.” Only the following events will be considered a valid change in status under Internal Revenue Service regulations:
  • Change in legal marital status
  • Change in number of dependents
  • Change in employment status that affects your eligibility for benefits
  • Dependent satisfies or ceases to satisfy eligibility requirements
  • Significant change of residence or work-site
  • Judgment, decree or order pertaining to child or spouse
You must report your change in status to your employer within 30 days of the qualifying event.

Can I enroll in the plan after the “Open Enrollment Period”?

Ordinarily the answer is no. However, if you are a new employee, you are eligible to enroll upon your date of hire according to your employer’s eligibility and waiting periods. Further, if you have a “change in status” during the plan year, you may also be entitled to enroll in the plan. Contact your Human Resource Department to complete your enrollment form. You typically have 30 days from your date of hire to enroll in the FSA program.

What happens if I leave my job while enrolled in the FSA Plan?

You will be given the opportunity to submit claims for expenses that were incurred while you were still employed. Please contact us if you have questions about the amount of time allowed by your plan. Expenses incurred after the date of separation will not be honored unless the expenses are for a Dependent Care FSA Plan, in which case the IRS permits reimbursement for expenses incurred through the end of plan year up to the amount you contributed. Depending on the situation, you may have the option to elect to continue participation in the Medical FSA Plan by making COBRA payments to your employer. Any unused monies will be forfeited.

What happens if I take a leave of absence while enrolled in the FSA Plan?

If you take a leave of absence while enrolled in the FSA plan, you have the option of either opting out or continuing in the Plan. If you elect to opt out of the plan, you may submit claims for expenses that were incurred before you went on leave of absence. You will have a grace period of up until 90 days after the end of the current plan year to submit claims for expenses that were incurred prior to your date of separation. Claims for expenses incurred after the date of separation will not be honored. Any unused monies will be forfeited.

If you elect to continue participation, you will need to either continue making contributions or make up the missing contributions when you return to work. Claims for expenses that are incurred during your leave will not be honored unless the plan is funded during the leave, either through payroll deduction for a paid leave or COBRA payments made by you to your employer.

If the plan was not funded during your leave, claims submitted for expenses incurred during the leave will not be honored. You will have the option to reenroll and be reinstated in the plan upon your return to work. Should you be reinstated, expenses incurred during the leave will be made eligible retroactively, provided that the plan year has not ended. If the plan year ends while you are on leave and the plan has not been funded, you cannot be reinstated.

When Sentinel Benefits & Financial Group observes a holiday, does the fax deadline change?

Yes, a message will be posted to your account on the website. Please reference your account for details regarding the adjusted deadline during the week prior to the holiday.

If an eligible FSA expense has a sales tax or shipping charge, can this be added to the expense for reimbursement?


If I am charged for an appointment that I cancelled or missed, is this an eligible expense?

No. A service must have been incurred in order to be considered an eligible expense.

When must expenses reimbursed under an FSA be incurred?

Expenses reimbursed under an FSA must be incurred during the member's period of coverage under that FSA: Expenses are treated as having been incurred when the member is provided with the care or service that gives rise to the expenses, not when the member is formally billed or charged or pays for the care or service. Expenses are not treated as incurred during a period of coverage if such expenses are incurred before the later of the following: 1. the date the FSA is first in existence, or 2. the date the member first becomes enrolled in the FSA.

How do I let Sentinel Benefits know about a change in address?

If you are updating your change of address on a claim form, you can either fax it to us at (781) 213-7301 or mail it to:

Sentinel Benefits & Financial Group
100 Quannapowitt Parkway, Suite 300
Wakefield, MA 01880

You may also call our Member Services Center at (888) 762-6088. Please note that you must also notify your HR Department with any change.

If I receive qualified services outside of the U.S., are these services eligible?

Yes, as long as they are eligible, medical expenses and the documentation provides a service date, description of services rendered and charges. In addition, you must provide us with the current conversion rate to U.S. dollars.

When is a letter of medical necessity required?

A letter of medical necessity is required when an expense must be substantiated by a written statement from your physician indicating that the treatment expense is necessary for the alleviation or prevention of a physical or psychological illness. Examples include massage therapy, supplements or vitamins, etc. Here’s a complete list of eligible/ineligible expenses.

Are cosmetic procedures eligible?

Generally cosmetic procedures (such as Botox treatment, teeth whitening, etc.) are ineligible. However, if treatment is needed due to a medical condition, then the expense may be considered eligible. A letter will be required from a doctor stating the medical condition and the medical necessity for such treatment.

Can my contributions to the Healthcare account be used to pay Dependent Care expenses or vice versa?

No. You may only use your FSA to reimburse the types of expenses for which the account was initiated.

Are my reimbursements made under an FSA, limited to amounts that I have actually paid into the plan?

It depends on the type of FSA:
  • Healthcare FSA must adhere to the "uniform coverage" requirement. Meaning, a member will have access to the entire plan year amount from the very first day of participation during the plan year. The maximum amount of reimbursement at any given time during the period of coverage cannot relate to the extent that the account has been funded.
  • Dependent Care FSAs are expressly exempt from the "uniform coverage" requirement. Thus, Dependent Care FSAs may operate to pay out claims limited to the amount that has been deposited to the account.

How do I submit a claim for mileage to and from the doctor and for prescription pickup?

To claim mileage, you will need to fill out a claim form, provide documentation that you were at a provider on that date, and tell us what the round trip mileage was.

How do I submit a claim for parking while obtaining medical care?

To claim parking while obtaining medical care, you will need to fill out a claim form, provide documentation showing you were at a provider on that date, and a copy of the parking receipt.

Are prescription drugs obtained from Canada or other countries outside the U.S. eligible for reimbursement?

Generally, no. IRS Publication 502 states, “In general, you cannot include in your medical expenses for the cost of a prescribed drug brought in (or ordered shipped) from another country, because you can only include the cost of a drug that was imported legally.” Two exceptions are noted: (1) prescribed drugs that the Food and Drug Administration (FDA) announces can be legally imported by individuals; and (2) prescribed drugs purchased and consumed in another country, if the drugs are legal in both the U.S. and the other country. The FDA takes the position that “virtually all shipments of prescription drugs imported from a Canadian pharmacy will run afoul of the [Federal Food, Drug, and Cosmetic] Act.”

Following publication of this position, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 directed HHS to promulgate regulations permitting individuals to import prescription drugs from Canada if HHS can certify that this would pose no additional risk to the public’s health and safety. However, an HHS report subsequently concluded that “it would be extraordinarily difficult and costly for ‘personal’ importation to be implemented in a way that ensures the safety and effectiveness of the imported drugs. Because the regulations allowing importation have not been promulgated, the IRS and FDA position remains that it is generally illegal for individuals to import prescription drugs from Canada.

Do orthodontic expenses have to have been incurred to be eligible for reimbursement from a medical FSA?

No, they do not, but the patient must be receiving a course of orthodontic, treatment related to the expense. Orthodontic expenses may be reimbursed when actual payments have been made, even if the services have not been rendered. Orthodontic expenses typically are payable to the orthodontic at the onset of treatment or through an installment-based treatment plan. This is an exception to the general rule that pertains to Medical FSAs.

Are registration fees reimbursable under the Dependent Care FSA?

Yes, the fee must be paid in order to obtain care. The fee should not be reimbursed until care is provided.

What does a “qualified dependent” mean?

For both the Healthcare and Dependent Care FSA, a “qualified dependent” is a person that you claim on your Form 1040 tax return as a “dependent.” For purposes of the Dependent Care FSA Plan, a “qualified dependent” must also be under age 13. However, if a dependent is mentally or physically handicapped, he or she will remain a qualified dependent for the Dependent Care FSA irrespective of age.

If I am caring for a parent in my home, do “Elder Care” expenses qualify under dependent care, i.e. a daily care facility program?

Yes, elder care is an eligible dependent care expense. Your elder dependent cannot be able to care for himself/herself, and must have your home as their primary residence. A daily facility is eligible, assisted living is not. Assisted living does not fall under the Healthcare FSA because medical services are not being provided.

If a dependent care claim was submitted for summer camp in advance to the camp start date, when can I expect reimbursement?

Because expenses cannot be reimbursed until the service has been provided, the claim will be eligible for release and payment on the last date of the claim. If you submitted for several, week-long camps at once, you may request that the camp be pro-rated and paid out on a week-by-week basis.

How does the grace period work?

The grace period is the 2 ½ month period of time after the end of the plan year when members are able to incur expenses and apply those expenses to the prior plan year. Please note that not all plans offer a grace period, so please check to see if your plan has adopted this option.

What is the run out period? And, how does it work with the grace period?

The Run out period is the timeframe when members can submit claims. This usually runs 90 days after the end of the plan year. For calendar year plans adopting the 2 ½ month grace period, members will have until March 15th to incur claims that will apply to the prior year’s elected amounts. And, they will have until March 31st to submit those claims.

Does the grace period affect terminated members?

Members who terminated during the Plan Year are not eligible to use the grace period. Members who terminated after the Plan Year End are eligible to use the additional 2 ½ months to incur an expense.

Does the grace period apply to both the Healthcare and Dependent Care Reimbursement Accounts?

Yes, the grace period applies to both the Healthcare and Dependent Care Reimbursement Accounts. As a reminder, it is always beneficial to contact your tax advisor regarding the tax impact of these benefits.

How are claims handled during the grace period?

When claims are received for expenses incurred during the 2½ month grace period, we will automatically use any remaining balance from the prior year to pay the claim. Claims for amounts exceeding the prior year’s balance will be paid from the current year’s election.

During the grace period, am I required to make claims against the previous year’s balance before submitting an expense against the current year’s election?

No, members are not required to submit claims against the previous plan year first. Our administration system will pay claims against any outstanding balance first, before paying claims against the current year account balance.

What if I submit a grace period claim that exceeds the previous plan year balance, but want the remaining amount reimbursed from the current plan year?

Our administration system will automatically split the claim according to the balance remaining in the prior plan year first, then apply the remainder to the current year balance.

Can the Benny Debit Card be used to pay for grace period expenses?

You can use the Benny card during the grace period if:
  • You have a remaining balance at the end of the prior plan year
  • You have enrolled for the new plan year
  • Your current plan year balance is greater than the purchase amount
How it works:
Step 1:  The Benny card is used as the form of payment at the merchant
Step 2:  Transaction is approved based on your current plan year balance
Step 3:  On a nightly basis, your account will be modified to adjust the prior year’s remaining balance*

*The newly created payment adjustment transaction will move the appropriate money from one plan year to the other, thereby adjusting the balances in the two plan years.

Will I be required to submit a receipt for a debit card claim?

In most cases, you will not need to submit a receipt to substantiate a debit card claim. However, if upon adjudication of a debit card swipe it is determined that backup documentation is needed, Sentinel will notify you by email or postal mail. You must then provide the receipt for the eligible expense or payment in lieu of a receipt. For this reason, it is important to always hold on to your receipts when using your Benny Card.
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