The tax savings available through the HCRA are made possible by Section 125 and Section 105(h) of the Internal Revenue Code.
These sections of the tax law also impose some restrictions on these types of accounts
Use it or lose it
Any money left in your account at the end of the Plan Year, for which you have not incurred an eligible expense, will be forfeited back to the Plan. All claims must be received by March 31 of the following year for expenses incurred during the previous Plan Year.
You cannot carry your account balance over to the next Plan Year
You are not allowed to carry over your account balances from the previous Plan Year to pay for expenses incurred in the following year.
You must incur expenses before you can be reimbursed
In order to receive reimbursement from your HCRA, you must incur an expense, and pay for that expense, before filing a claim for reimbursement. Once you incur an eligible expense, you must fax or mail a Flexible Spending Account Reimbursement Form with FlexServ.
You cannot transfer money between accounts
If you also elect participation in the County Dependent Care Reimbursement Account, you cannot transfer funds from your Health Care Reimbursement Account to pay for dependent day care expenses, nor can you use money from the Dependent Care Reimbursement Account to pay health care expenses.
You cannot change your elections during the year
Once you have enrolled and made your HCRA elections, you cannot make changes until the next year’s open enrollment period, unless you have a qualifying change in family or employment status.