Fraudulent Activity Hits Federal FSA Accounts, Employees Urged to be Vigilant
The Office of Personnel Management (OPM) is working to boost security and help those affected, after a wave of fraudulent activity hit a small number of government employees who participate in the Federal Flexible Spending Account program (FSAFEDS).
According to OPM, scammers set up new flexible spending and dependent care accounts, “leading to unauthorized and unexpected deductions from employees’ pay.”
Scammers also made fake reimbursement requests on existing federal FSA accounts.
Several hundred accounts were affected. Politico reported that scammers only swiped a couple hundred thousand dollars.
The FSAFEDS program, which allows federal employees to set aside pre-tax dollars to pay for healthcare, dependent care, and other health related items, is administered by HealthEquity.
The Utah-based provider says it made OPM aware of the situation and is taking steps to improve security by implementing Login.gov requirements and setting up dual-factor authentication for federal employees.
OPM is reimbursing affected parties.
In the meantime, all participating employees are urged to keep a close eye on their pay stubs.
As of now, there’s no evidence that OPM or HealthEquity’s servers were compromised. The investigation is ongoing to figure out how the scam happened.
Nevertheless, OPM temporarily disabled enrollment on FSAFEDS “out of an abundance of caution.” Reimbursement claims can still be submitted.
FSA Program Not Widely Used
Last year, less than 20 percent of eligible federal employees set up an FSA account through the health program.
But eligibility for the program is expanding. Starting in January 2024, OPM made active-duty service members and Active Guard Reserve members eligible for Dependent Care Flexible Spending Accounts. That made an additional 400,000 people eligible.
Enrollment happens during open season in the fall, unless there is a qualifying life event such as a new hire or change in family status.