When a plan year ends and a new one begins, we are frequently asked questions regarding debit card use during this period for Flexible Spending Accounts and Transportation Accounts.  Here is a brief explanation as to how things work: Debit cards are loaded with “purse” values. These purse values indicate the available account balance in your flexible spending account or transit account.  Note that some plans also have a “grace” period allowing eligible expenses to continue to be incurred for up to an additional two and a half months after a plan year ends, and still apply to the previous year’s account balance.

So, what happens at year end, especially presuming that you have funded your accounts again for next year?

FSA Debit Cards – No Grace Period

  • All expenses incurred in 2013 will go toward your 2013 election.
  • If  you pay for an expense with your debit card in 2013 for a service that was incurred 2012, the expense will ultimately be taken from your 2012 account balance. In this scenario, if you no longer have a balance in your 2012 account, you will need to payback your employer, as the expense would be deemed ineligible.

FSA Debit Cards – Grace Period

  • You should first confirm the length of your employer’s grace period, as your employer could adopt up to a 2 ½ month extension.
  • Any expenses incurred during the adopted grace period will first be deducted from any remaining balance in the 2012 plan year. Any remaining portion will automatically be taken from your 2013 election.

Transit Account Debit Cards

  • You should make sure your employer allows the use of the debit card with the transportation account.
  • While the Transit Account has a plan year, unused contributions carry over from month to month and only expire if you leave the company. This means that as long as you do not exceed the allowable monthly reimbursement amount, you can use accrued contributions from previous plan years at any time during the current plan year.

If you are confused by how these plan balances transition, you may, of course, call one of our representatives to review your personal situation.


“Pre-tax” is your ability to pay for, and set aside money, for certain expenses from your paycheck before your paycheck is taxed by Federal Withholding, Social Security, and, in some instances, state taxes. You must pay for these expenses anyway, so why not save tax dollars and increase your take home pay while doing so.

What can be paid using pre-tax dollars?

  • Your share of your health, dental, vision, disability, accident, and group life ($50,0000 maximum) insurance premiums;
  • Your eligible out of pocket medical, dental, and vision expenses;
  • Your eligible work-related daycare expenses for the care of a live-in dependent such as a child or elderly relative;
  • Your eligible parking and commuter expenses traveling to and from work.


INNOVA’s staff is experienced and knowledgeable in the area of employee benefits including Cafeteria Plans and Parking and Transit Plans. By choosing the benefits that fit your needs, you will save valuable tax dollars and increase your take-home pay.

For participating Employers, our flexGuide© service offers guidance to you in determining the best course of action to take when enrolling in your employer’s flexible spending and/or qualified transportation plans. We want to help you understand the program, and the rewards of participating. You will see how beneficial this can be for you and your family.

By participating in your employer’s Flexible Benefit Plan and/or Qualified Transportation Plan you will immediately start to increase your take-home pay and save tax dollars.