Aerial view of the Madison isthmus with Lake Mendota on the left
Human Resources
Erin Hillson, Human Resources Director

Flex Spending Account

The City of Madison offers an optional Flexible Spending Account (FSA) program. Total Administrative Services Corporation (TASC) is the third party administrator for City FSAs.

Eligible employees can place pre-tax dollars in a Healthcare FSA Account and/or a Dependent Care Assistance Program (DCAP) FSA Account. Participating employees will automatically have their elected funds deducted from their paychecks and deposited into their TASC FSA account(s).

Employees sign up for Flex Spending on a calendar year basis, and must actively re-enroll during the annual Open Enrollment period for each new Plan Year in which they wish to participate. New employees may sign up within their first 30 calendar days of employment, with coverage for that Plan Year starting when their election is processed.

Please note: Expenses related to domestic partners and domestic partners' children (who are not the employee's own child) are not allowed to be reimbursed through FSAs. FSAs are bound by IRS definitions of what pre-tax dollars can be used for.

Midyear Flex Spending Changes

For the 2026 Plan Year, Healthcare and Dependent Care Flex Spending Account enrollments, election changes, and/or election cancellations may be made within 30 calendar days of an eligible midyear qualifying event.

  • Qualifying events are subject to IRS restrictions and regulations on Flex Spending.
  • The specific change(s) you can make depend on your qualifying event. For example, birth is not a qualifying event to reduce Flex Spending elections - only to enroll in or increase elections. Additionally, not all qualifying events apply to both Healthcare FSA and DCAP accounts.
  • Midyear enrollments, election changes, and/or election cancellations can only be made prospectively per IRS regulations. This means only future contributions can be impacted; it is not possible to make changes retroactively.
  • Documentation is required for most qualifying events.

If you believe you have experienced an eligible midyear qualifying event, please reach out to the Benefits Team at (608) 266-4615 or benefits@cityofmadison.com and submit a Flexible Spending Change of Election Form to Human Resources as soon as possible.

Frequently Asked Questions (FAQ)

The Flex Spending section of the Open Enrollment FAQ includes the answers to several frequently asked questions, including:

  • What is Flex Spending?
  • How do I decide whether to participate in Healthcare FSA and/or DCAP?
  • How do I figure out who counts as a "qualifying person" for Flex Spending?

And more!

If your question is not answered by the FAQ or this webpage, please reach out to the Benefits Team at benefits@cityofmadison.com or (608) 266-4615.

Healthcare FSA

For the 2026 Plan Year, eligible employees can contribute a maximum of $3,400 annually to Healthcare Flexible Spending Accounts. Healthcare account maximums are on a per employee/per employer basis. You will have access to your total Healthcare FSA annual contribution immediately at the start of the Plan Year.

Deposited funds can reimburse employees for:

Important Reminders

  • Flexible Spending dollars cannot be used to pay for insurance premiums, as insurance premiums are already paid using pre-tax dollars.
  • The list of expenses under "other qualifying expenses" is not exhaustive or comprehensive. IRS regulations determine what expenses are eligible for Flex Spending reimbursement, and are subject to change each year.
  • Per IRS regulations, some expenses may require a Letter of Medical Necessity (LMN) in order to be eligible for reimbursement.

Dependent Care FSA (DCAP)

For the 2026 Plan Year, there is a $7,500 per household maximum for Dependent Care Assistance Program (DCAP) Flexible Spending Accounts (or a maximum of $3,750 each for married individuals filing separately). Funds are available up to the current account balance only (year-to-date payroll deductions).

Deposited funds can reimburse employees for:

Important Reminders

  • Dependent care expenses must be for qualifying person(s). It is the responsibility of the employee to determine if their child(ren) or other family member(s) would be considered a "qualifying person" per IRS regulations.
  • Special IRS rules apply to the children of divorced or legally separated parents.
  • DCAP funds are not for spouse or child medical expenses - they are only for the use of eligible care for qualifying person(s) that enables you to work, such as daycare.

Using Funds

There are two ways to access Healthcare FSA funds, outlined below. Please note that DCAP funds can only be accessed via the second method; it is not possible to use the TASC Payment Card for dependent care expenses.

  1. Total Administrative Services Corporation (TASC) Payment Card: Upon enrollment, you will receive a TASC payment card in the mail, which can be used to pay for eligible Healthcare FSA expenses anywhere Mastercard is accepted. A claim paid using the TASC payment card is still required under Internal Revenue Service rules to be substantiated as an FSA-eligible expense. If a payment card claim is unable to be auto-substantiated via a pre-established database or claim feed, you may be required to provide supporting documentation (receipt, Explanation of Benefit, etc.) in order for the claim to be considered valid. It is recommended that you save receipts for all expenses, as they may be required to substantiate claims.
  2. Request a reimbursement: Submit a claim to be reimbursed for qualifying expenses, as well as a receipt documenting the expense. You may submit a request for reimbursement via the TASC Mobile App, Online Request for Reimbursement form via the TASC website, text message, fax, or mail.

Because FSA claims may be subject to audit, it is recommended that employees keep records and receipts related to FSA claims for a minimum of three years beyond the tax filing date for the year that the expenses were incurred. The IRS considers it the responsibility of the individual to retain and be able to provide sufficient documentation for claims.

Requesting Cards for a Spouse/Dependent

Each participant receives one TASC payment card upon enrollment. An additional card for a spouse and/or adult dependent child is available at no cost.

  • Online: Login to your TASC account.
  • Phone: ​Contact TASC Participant Support Services 24 hours per day/7 days per week at 800-422-4661

The TASC payment card and a standard Cardholder Agreement will be mailed directly to your mailing address.

2026 Plan Year and Grace Period

The 2026 Plan Year will run from January 1, 2026 to December 31, 2026.

There is a grace period for reimbursement of eligible expenses incurred during the Plan Year. You have until March 15, 2027 to incur claims against your 2026 FSA and DCAP funds and until March 31, 2027 to submit claims against your 2026 FSA and DCAP funds.

This means that employees who still have unused 2026 FSA/DCAP funds may incur expenses against those 2026 funds through 3/15/2027 and also have until 3/31/2027 to submit claims for eligible expenses incurred through 3/15/2027.  

2025 Plan Year and Grace Period

The 2025 Plan Year runs from January 1, 2025 to December 31, 2025.

There is a grace period for reimbursement of eligible expenses incurred during the Plan Year. You have until March 15, 2026 to incur claims against your 2025 FSA and DCAP funds and until March 31, 2026 to submit claims against your 2025 FSA and DCAP funds.

This means that employees who still have unused 2025 FSA/DCAP funds may incur expenses against those 2025 funds through 3/15/2026 and also have until 3/31/2026 to submit claims for eligible expenses incurred through 3/15/2026. 

Use-or-Lose Rule

Employees must use the amount in their accounts either:

  1. During the calendar year in which the money is placed in the account, or
  2. Within a grace period that typically extends through March 15 of the following calendar year. Outside of the grace period, an unused amount cannot be rolled over from year to year.

FSA funds that are unused at the end of the grace period in the calendar year following the Plan Year will be forfeited to the employer.

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