Benefits Administration Letter

Number: 16-303 Date: May 2016

United States 

Office of 

Personnel Management

The Federal Government’s Human Resources Agency

 

Subject: FSAFEDS Program: Announcing A New Third Party Administrator 

Purpose

The U.S. Office of Personnel Management (OPM) has selected a new contractor, WageWorks, Inc., to 

administer the Federal Flexible Spending Account Program (FSAFEDS). The effective date of the 

contract was March 1, 2016. Transition activities are underway and will continue until WageWorks, 

Inc. assumes full administration of FSAFEDS in the Fall of 2016. The new third party administrator of

the program, WageWorks, is located in San Mateo, California. The reserve account for the FSAFEDS 

Program will continue to be maintained by OPM. 

As described below under Specific Billing Invoice Information, beginning with the October 2016 

FSAFEDS invoices, WageWorks will send out two separate invoices twice a year to the participating 

agencies. One invoice will be for the Reserve Account Fee; agencies must pay the Reserve Account 

Fee directly to OPM. The other invoice will be for the contractor administrative fees; agencies must 

pay the contractor administrative fees directly to WageWorks. Both the payable-to-OPM portion and 

the payable-to-WageWorks portion will be in the invoice packages you receive from WageWorks 

twice a year.

Please note: fee amounts may change from year to year for the Reserve Account and WageWorks. 

You will be notified of any changes when information becomes available.

Background

Section 1127 of the National Defense Authorization Act for 2004 (P.L. 108-136) requires agencies to 

pay fees associated with employee participation in FSAFEDS. When an agency is presented with an 

invoice from WageWorks for employee fees, the agency must pay that invoice pursuant to P.L. 108-

136 in a timely manner as required by the Prompt Payment Act (P.L. 97-177).

The cover sheet of the contract OPM executed with WageWorks to administer FSAFEDS and section 

1127 are the only documentation that agencies need for paying FSAFEDS invoices. Interagency 

agreements and purchase orders are not accepted for payment. If you would like a copy of the contract 

cover sheet, please email the OPM FSAFEDS office at FSA@opm.gov using “WageWorks contract 

cover sheet” as the subject. We will email you the contract cover sheet. 
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The current agency fee is $2.53 per participating employee per month for HealthCare Flexible 

Spending Account (HCFSAs), Limited Expense HCFSAs and Dependent Care Flexible Spending 

Account (DCFSAs). OPM is buying down these fees, and participating agencies in the FSAFEDS 

program are currently paying the following fees:

• Reserve Account Fee:

- $.25 per participating employee per month, placed in reserve to help cover the risk 

of overpayments associated with HCFSAs and Limited Expense Flexible Spending 

Account (LEX HCFSAs) and to pay BENEFEDS for the payroll processing 

functions associated with FSAFEDS;

• Contractor Administrative Fee:

- $.70 per participating employee per month for HCFSAs and Limited Expense 

HCFSAs; and

- $.70 per participating employee per month for DCFSAs. 

• As noted above, these fees may change from year to year.

Specific Billing Invoice Information 

WageWorks provides an invoice package to each participating agency twice per year.

The first invoice package, sent in February/March, includes (as of the cut-off date for theinvoice):

• employees who enrolled during Open Season and are actively participating in FSAFEDS. 

• employees with approved late enrollments after Open Season and are actively

participating in FSAFEDS.

The second invoice package sent in October includes (as of the cut-off date for theinvoice):

• new and eligible employees who enrolled subsequent to Open Season andare actively 

participating in FSAFEDS.

Please note that invoices are billed for participating employees based on their original effective date, 

regardless of when WageWorks received their first allotment.

Each invoice package contains supporting documentation for sub-agencies, bureaus, etc., as reflected 

on the enrollment screen options through the FSAFEDS website. Agencies are responsible for 

coordinating payment with any applicablesub-agencies.

If you have questions about the billing process, the impact on past-due invoices or billing information, 

please contact WageWorks directly via email at FSAFEDSBILLING@wageworks.com or by calling 

Norma Valencia at (650) 577-5336.
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Current Payment Procedures 

Part Payable- to-OPM 

Agencies must continue to pay the Reserve Account Fee described earlier, as indicated on the invoice, 

directly to OPM. 

Agencies must transmit an Intra-Governmental Payment and Collection (IPAC)system transaction to 

OPM using the following IPAC parameters:

Office of Personnel Management

Agency Location Code: (ALC) 24-00-0002

Treasury Account Symbol: (TAS) 024X0800

Standard General Ledger: (SGL) Debit 1010 and Credit 5405

Business Event Type Code:COLL

Federal Account: (F)

Description: WageWorks Invoice Number (insert the number printed on the invoice) 

Point of Contact: Include the name and email address of the person who’sfamiliar with 

paying the FSAFEDS fees.

If you are unable to use the IPAC system, you must email Finance@opm.gov and request OPM’s 

banking information to remit the funds via Electronic Funds Transfer (EFT). The EFT system of

payment can only be used by those agencies unable to process an IPAC. You are required to report 

both the IPAC and EFT remittance as an Intra-Governmental Elimination transaction.

Payable-to-WageWorks 

Agencies must continue to pay the Contractor Administrative Fees described earlier directlyto 

WageWorks electronically, using the payment information on the invoice. 

If you have any questions regarding the payment process, please send an email to Finance@opm.gov. 

You may also call us at (202) 606-0606. If there are questions about WageWorks, please send an 

email to FSA@opm.gov. 

Sincerely,

Kolo Babagana

Acting Associate Chief Financial Officer

Financial Services