Federal employees choosing a 2027 health flexible spending account can set aside up to $3,500 and elect a new debit card to pay eligible bills. The Federal Flexible Spending Account Program, known as FSAFEDS, announced the higher limit on Nov. 10, one day after Open Season began. Employees have through Dec. 14 to make their election. FSAFEDS contribution notice
The new card changes how employees can pay. The two carryover limits depend on which year the unused money came from, and 2026 dollars that move into 2027 stay off the card. Employees planning to use an old balance for a January prescription or a pair of glasses will need to file a reimbursement claim. USDA enrollment guide
What you can elect for 2027
The $3,500 maximum applies to both the Health Care FSA and the Limited Expense Health Care FSA. The latter is designed for eligible dental and vision expenses and can be an option for employees who have a health savings account. A dependent care FSA is a separate account for qualifying care expenses, such as child care. Its 2027 maximum remains $7,500 per household, or $3,750 for a married person filing separately. The minimum annual election is $100 for each account. OPM account guide
The IRS inflation adjustment increases the health FSA limit by $100 from 2026. Think about recurring eligible costs and bills you already expect, such as eyeglasses or dental work, when you choose an amount. The higher ceiling allows a larger election if you need one. Other workplace FSAs can have their own rules on carrying money forward. FSAFEDS publishes the rules for participating federal agencies.
When to pick the card
You can choose the debit card when you enroll in either health FSA. You can use it to pay eligible charges directly. Keep itemized receipts or explanations of benefits in case the program asks you to document a purchase. The provider or store must accept the card, and the account you elect still determines which costs qualify. FSAFEDS card guide
Another option is paperless reimbursement if your health, dental or vision carrier participates. FSAFEDS says you can choose automatic reimbursement for eligible claims or review claims loaded into your account and choose which ones to submit. The program also accepts claims online and through its app. The choice between a card and paperless reimbursement lasts for the 2027 benefit year, according to the USDA enrollment guide. You can still submit a claim yourself if you choose the card. Dependent care expenses follow the separate reimbursement rules for that account. FSAFEDS card FAQ
Which balance pays a January bill
If you have $500 left in a 2026 health FSA and reenroll for at least $100, that $500 falls within the $680 you can carry into 2027, assuming you meet the program’s eligibility rules. If you choose the card, submit a reimbursement claim to use the carried-over balance. For example, if you elect $100 for 2027 and submit an eligible $150 January bill, the program applies the new year’s money first. Assuming the full $100 and $500 balances are available, $100 would come from the 2027 election and $50 from the carryover, leaving $450 of the old balance. FSAFEDS advises submitting any outstanding 2026 claims before filing for 2027 expenses.
The $700 carryover limit applies to unused 2027 health FSA funds that move into 2028, again subject to reenrollment of at least $100. For dependent care, unused 2027 money can cover eligible expenses incurred during the grace period through March 15, 2028. The last day to submit 2027 benefit-period claims is April 30, 2028. FSAFEDS deadline calendar
Open Season elections take effect Jan. 1. FSAFEDS enrollment is a separate election that employees must make each year. To keep a health FSA and preserve an eligible 2026 balance, reenroll through FSAFEDS by Dec. 14.
