Flexible spending accounts

Correct Answer: A qualifying life event, such as marriage or the birth of a child.

An employee can change their Flexible Spending Account (FSA) contribution outside of the open enrollment period when they experience a qualifying life event, such as marriage or the birth of a child. These significant personal changes can impact an employee's benefits needs, allowing for adjustments to their FSA contributions. The other options, including annual performance reviews, completing a certain number of work hours, or employer-initiated benefit adjustments, do not typically provide the opportunity to change FSA contributions outside the open enrollment period.

Correct Answer: An employee cannot simultaneously contribute to both a Health FSA and an HSA unless the FSA is limited to specific expenses.

An employee cannot simultaneously contribute to both a Health FSA and an HSA unless the FSA is limited to specific expenses. This is because general-purpose FSAs would render the employee ineligible for an HSA. However, if the FSA is restricted to specific expenses, such as dental or vision, it does not interfere with HSA eligibility. Other options incorrectly suggest that employees can contribute to both accounts without restrictions, that FSA contributions affect HSA limits, or that funds can be used interchangeably between the two accounts for any eligible healthcare expenses.

Correct Answer: Prescription medications required by a doctor.

Prescription medications required by a doctor is generally considered an eligible expense under a Health Flexible Spending Account (HCFSA) because they are necessary for medical treatment. Over-the-counter supplements and vitamins are not typically eligible unless prescribed by a doctor. Cosmetic surgery for appearance enhancement is not eligible as it is not considered medically necessary. Non-prescription contact lenses are generally not eligible unless they are prescribed and necessary for vision correction.