For the most part, your FSA card should work where it makes sense: at locations like pharmacies, vision centers, doctor and dentist offices, and so on. But if you try to use your card at a restaurant or bike shop, even if that bike shop happens to sell FSA eligible bandages, chances are your card won't work.

The Use-It-Or-Lose-It Rule If the employee fails to incur enough qualified expenses to drain his or her FSA each year, any leftover balance generally reverts back to the employer. However, there are two exceptions to the use-it-or-lose-it rule. An FSA plan can allow a grace period of up to 2 1/2 months.

What Happens if I Use My FSA Incorrectly? If the benefits card is accidentally or intentionally utilized for ineligible expenses, you are responsible for reimbursing your account. You will be notified if you have an ineligible expense, and your benefits card may be deactivated until your account is reimbursed.

While FSA funds are deducted by the employer during payroll, the benefits vendor administering the FSA is responsible for verifying the receipts rather than the employee.

Employers are not allowed to ask for money back that you spent from your FSA if you quit or retire. This is due to the Uniform Coverage rule which ensures that your Flexible Spending Account funds are available to you in full as soon as your plan year starts. Any FSA amount you don't use is returned to your employer.

4. Can I use my Health Care FSA to reimburse outstanding medical expenses from the prior year? No, expenses must be incurred during the current plan year.

If the FSA is overspent, the annual election amount may be adjusted, and the per-pay-period deduction amount is increased to make up for the missed contributions. Either way, you would be able to submit manual claims for reimbursement for eligible expenses incurred while the garnishment was in place.