During what period can Health Care Flexible Spending Arrangements reimburse medical expenses?

Health Care Flexible Spending Arrangements (FSAs) are designed to reimburse employees for qualified medical expenses incurred during the coverage period selected by the employee. This period usually aligns with the employer's plan year and allows employees to use the funds for eligible expenses incurred during that timeframe, regardless of when they contribute to the FSA.

The "coverage period" encompasses all eligible medical expenses that an employee might face, as long as those expenses occur while the coverage is active. This structure fits within the IRS regulations that govern FSAs, ensuring that employees can access their funds as needed for medical expenses incurred during the specified plan year.

In this context, the other periods mentioned—prior quarter, prior month, and current month—do not accurately represent the time frame during which medical expenses can be reimbursed from a Health Care FSA. These options suggest reimbursement can be provided for expenses outside the established coverage period, which is not aligned with how FSAs are intended to function.