Take advantage of tax savings with TexFlex flexible spending accounts
4-minute read
Know your benefits
Learn about your options in preparation for Summer Enrollment.
For the next few months, News About Your Benefits will feature overviews of the plans you can elect, change or drop during Summer Enrollment. For April, we highlight TexFlexSM flexible spending accounts and State of Texas VisionSM.
Thousands of state agency and higher education employees lower their federal income taxes every year by participating in TexFlexSM flexible spending accounts (FSAs). FSAs allow employees to set aside money directly from their paychecks, before taxes, and then use those pre-tax savings to pay for out-of-pocket dependent day care and/or health care or dental and vision care.
How it works
There are three types of FSAs:
- A health care FSA pays for eligible health, dental and vision expenses for both you and your eligible dependents. Examples of eligible health care expenses include copays, deductibles, coinsurance and some over-the-counter items not covered by your health insurance. Consumer Directed HealthSelectSM participants cannot have a health care FSA.
- A limited-purpose FSA pays for eligible dental and vision expenses for both you and your eligible dependents. Only Consumer Directed HealthSelect participants can have a TexFlex limited-purpose FSA.
- A dependent care FSA pays for the care of children or disabled adults while you’re at work. Examples of eligible expenses include after-school care, nursery school, preschool, summer day camp and adult daycare. Eligible children must be under age 13. Eligible adults (or children age 13 and older) must be unable to care for themselves.
You can view a list of eligible expenses or use the eligible expense search tool by visiting the TexFlex website.
During Summer Enrollment, you can decide how much you want to save for these expenses over the plan year and elect how much you’ll contribute each month from your paycheck. (See more details in “How to enroll” below.) There are minimum and maximum amounts you can contribute each year.
In the new plan year, your contribution will be automatically withdrawn from your paycheck, pre-tax, and deposited into your FSA(s).
You can purchase eligible services or items and submit your claims, or use your TexFlex debit card to pay directly from your health care or limited-purpose FSA. You can file a claim for dependent care expenses only after the care has been provided, even if you pay for the care in advance.
The money in your FSA is subject to use-it-or-lose-it provisions. Please be aware of the deadlines for incurring eligible expenses. See the chart below for more information. You have until Dec. 31 of the following year to file claims for reimbursement.
Be sure to save your receipts for all eligible expenses. The Internal Revenue Service (IRS) regulates FSAs and requires all purchases with TexFlex funds to be validated. The TexFlex administrator makes every effort to validate expenses on your behalf, but may ask you to submit proof that you used your FSA funds for eligible expenses.
You must claim dependents on your federal income taxes to pay for their health, dental, vision and/or dependent care with your FSA. However, dependents don’t have to be enrolled in Texas Employees Group Benefits Program (GBP) insurance for you to pay for their eligible expenses with TexFlex FSA funds.
Contribution amounts
All TexFlex FSAs have a minimum annual contribution of $180 and maximum annual contributions set by the IRS each year. The following chart may help you decide which account(s) are right for you to enroll or change during this year' summer enrollment for Plan Year 2025 (Sept. 1, 2024 – Aug. 31, 2025).
| Health care FSA | Limited-purpose FSA | Dependent care FSA | |
|---|---|---|---|
| Maximum annual contribution | $3,200 per participant | $3,200 per participant | $5,000 per household |
| Examples of eligible expenses |
|
Eligible vision and dental expenses not paid by insurance or reimbursed by another source |
|
| Carryover of funds or grace period | Up to $640 in carryover is allowed from Plan Year 2025 (ending Aug. 31, 2025) to Plan Year 2026 (starting Sept. 1, 2025). Unspent Plan Year 2025 funds above $640 will be forfeited. | Up to $640 in carryover is allowed from Plan Year 2025 (ending Aug. 31, 2025) to Plan Year 2026 (starting Sept. 1, 2025). Unspent Plan Year 2025 funds above $640 will be forfeited. | There is a 2½-month grace period from Sept. 1 through Nov. 15, 2025. Any Plan Year 2025 funds not spent by Nov. 15, 2025 will be forfeited. |
Cost
There will be no administrative fee for TexFlex FSAs in Plan Year 2025.
How to enroll
If you are a benefits-eligible active employee, you can enroll in, make changes to or cancel a TexFlex FSA during Summer Enrollment or within 31 days of a qualifying life event (QLE). You can be enrolled in a dependent care FSA and either a health care or limited-purpose FSA at the same time. You do not have to participate in GBP health, dental or vision insurance to enroll in a TexFlex FSA.
If you are already enrolled in a TexFlex FSA and want to continue your current contributions in the new plan year, you don’t need to make any changes during Summer Enrollment. Your current contributions will continue automatically.
During your Summer Enrollment phase or after a QLE, you can enroll through your ERS OnLine account, by filling out a TexFlex enrollment form and returning it to you HR department, or by calling ERS.
Learn more
Visit texflexers.com to learn more. The website includes more details about eligible expenses and FSA rules, and a worksheet to help you calculate how much you might want to contribute to an FSA (or FSAs).
You can also contact Inspira Financial, the administrator of TexFlex, at (866) 353-9839 (TTY: 711) Monday – Friday, 7 a.m. – 7 p.m. CT and Saturday, 9 a.m. – 2 p.m. CT.