What is one requirement for participants of an FSA prior to reimbursement?

For participants of a Flexible Spending Account (FSA) to qualify for reimbursement, one essential requirement is that the expenses must have been incurred during the coverage period. This means that the expenses for which reimbursement is being sought must occur while the participant is actively enrolled in the FSA plan, and before the end of the plan year or grace period, if such a period applies.

In an FSA, any eligible claims, such as for medical expenses or dependent care costs, can only be submitted for reimbursement based on expenses that took place when the participant had an active account. This aligns with the fundamental structure of FSAs, which are designed to assist with out-of-pocket costs incurred for qualified expenditures during a specified period, thereby providing tax benefits to participants who conform to these timing rules.

Other options do not accurately represent the requirement for reimbursement; for example, claims do not have to be submitted annually, nor must they exceed a specific dollar amount like $500. Additionally, while being enrolled in a high-deductible plan is relevant for Health Savings Accounts (HSAs), it is not a requirement for participating in an FSA.