About Flexible Spending Accounts
Flexible Spending Accounts (FSAs) allow you to pay for out-of-pocket health care and dependent care expenses with pre-tax dollars. Your contributions are subtracted from your paycheck before federal, state and FICA taxes are calculated on your pay, so you save money on taxes. Contributions to FSAs do not reduce your pay for purposes of determining your life insurance, travel accident insurance, long-term disability or retirement benefits provided by the university.
An external vendor, Inspira Financial, will process claims for reimbursement. Visit Inspira's U-M microsite for more information.
U-M offers three kinds of FSAs:
- The Health Care FSA is used to pay for most out-of-pocket medical, vision, and dental care expenses for you and your eligible dependents.
- The Limited Purpose FSA covers eligible dental, orthodontic and vision expenses. It is only available to employees enrolled in the Consumer-Directed Health Plan (CDHP).
- The Dependent Care FSA is for eligible day care expenses for a dependent child under the age of 13, or elder care for a dependent adult, while you and your spouse work (or if your spouse is a full-time student or disabled).
You can enroll in one type of FSA or both. You contribute tax-free dollars to your FSA(s) through payroll deductions. You can claim amounts equal to your entire annual health care contribution from your Health Care Flexible Spending Account at any time during the year. To receive a reimbursement from your Dependent Care FSA, you must have enough funds in your account to cover the claim at the time you make the request for reimbursement.
Flexible Spending Account Limits
2025
- Health Care FSAs: You can contribute a minimum of $120 ($10 per month) up to a maximum of $3,200 per calendar year.
- Limited Purpose FSAs: You can contribute a minimum of $120 ($10 per month) up to a maximum of $3,200 per calendar year.
- Dependent Care FSAs: You can contribute a minimum of $120 ($10 per month) up to $5,000 each calendar year. Highly compensated faculty and staff (family gross earnings in 2024 of $155,000 or more) can contribute $3,600 per year.
2024
- Health Care FSAs: You can contribute a minimum of $120 ($10 per month) up to a maximum of $3,050 per calendar year.
- Limited Purpose FSA: You can contribute a minimum of $120 ($10 per month) up to a maximum of $3,050 per calendar year.
- Dependent Care FSAs: You can contribute a minimum of $120 ($10 per month) up to $5,000 each calendar year. Highly compensated faculty and staff (family gross earnings in 2023 of $150,000 or more) can contribute $3,600 per year.
FSA Enrollment Forms and Documents
Download a form or complete an eForm to enroll in an FSA. Unlike other benefits, IRS rules do not allow FSA enrollments to carry over from year to year. You need to enroll in an FSA each year you wish to participate.
Access additional forms, information and documents.
FSA Books
- 2024 Flexible Spending Accounts (effective Jan. 1 - Dec. 31, 2024)
- 2025 Flexible Spending Accounts (effective Jan. 1 - Dec. 31, 2025)
Inspira Card
Inspira Financial will mail a debit card to new enrollees in a Health Care FSA to pay for eligible health care expenses. If you are only enrolled in a Dependent Care FSA, you will not receive a card. If you are enrolled in a Health Care FSA and did not receive a card, call Inspira Financial at 877-343-1346. Learn more about using your card.
Here is a sample of what the card looks like:
The plan year ends on December 31. A grace period allows you to incur eligible expenses up to March 15 of the following year.
IRS "Use It or Lose It" Rule
Contribute to an FSA only the amount you are reasonably sure you will spend annually and file all claims for reimbursement by the deadline.
In accordance with Internal Revenue Code and supporting treasury regulations, the university uses forfeited funds to pay administration costs of the of the FSA program. In the alternative, forfeitures may also be used by the university to fund employee benefits administration costs, education and benefit election tools, MHealthy coaching and health initiatives, the Emergency Hardship Program, and university scholarship funds.
Benefits of an FSA
Flexible Spending Accounts reduce your annual taxes. Here is an example of possible tax savings with an FSA.
| Annual Savings Example* | With an FSA | Without an FSA |
|---|---|---|
| If your annual taxable income is: | $28,000 | $28,000 |
| And you deposit this annual amount pretax into a Health Care Flexible Spending Account: | ($1,500) | $0 |
| Your taxable income is now: | $26,500 | $28,000 |
| Subtract federal and Social Security taxes: | ($9,447) | ($9,982) |
| Subtract after-tax dollars spent on medical expenses without an FSA: | $0 | ($1,500) |
| Your real spendable income is: | $17,053 | $16,518 |
| Your annual tax savings is: | $535 | $0 |
* Potential tax savings shown for demonstration only. Actual savings will vary based on your individual tax situation. Please consult a tax professional for more information.
Contact Inspira Financial
- For more information on the benefits of FSAs and how to use your accounts, visit the Inspira's U-M microsite.
- Connect to a Inspira Financial customer service agent through the Live Chat feature:
- Once logged into the Inspira Financial member site, select Help & Support at the top of the screen.
- Select Contact Us.
- From the displayed page, click CHAT NOW.
- Agents are available to chat Monday - Friday, 8 a.m. - 6 p.m. (ET)
- Call Inspira Financial: (877) 343-1346
- Send claims to:
Inspira Financial
P.O. Box 8396
Omaha, NE 68108-0396