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FSA accounts and ex-pats


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Hi All,

We have a handful of ex-pats (US citizens working abroad) where we offer an international plan for medical, dental and vision benefits.

At Open enrollment for US we offer them the option of healthcare and dependent care accounts along with voluntary life and voluntary LTD. We have recently implemented other voluntary benefits(pet, legal, ID theft & auto/home) but carriers indicated residence must be US based so have not offered to the ex-pats

Are there any things to look out for in offering the FSA accounts?

Much thanks in advance!

Kind regards,


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Most Section 125 cafeteria plans will limit eligibility to employees on the U.S. payroll.  So the plan terms may exclude these ex-pats depending on the arrangement.

In any case, the only "benefit" of an FSA (assuming no employer contribution) is the tax exclusion for employee salary reduction contributions.  So if these employees are not receiving U.S. source income and are not subject to U.S. taxes, there is no reason for such employees to enroll the FSA (even in the case where they are technically eligible).

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