Flexible Spending Account: Who Qualifies and What You Get
Learn how to use pre-tax dollars to cover your out-of-pocket health costs through a Flexible Spending Account.
A Flexible Spending Account (FSA) is a way to set aside money from your paycheck before taxes are taken out to pay for certain medical expenses.
Who it's for
This account is available to employees whose employers offer an FSA as part of their benefits package.
What you get
You receive access to pre-tax dollars, which means the money is taken from your salary before income taxes are calculated. This allows you to pay for various out-of-pocket health costs using money that hasn't been taxed, effectively lowering your overall tax burden.
What it costs you
To use this scheme, you must make your selections and set up the account during your employer's designated open enrollment period.
The catch to know
The most important thing to remember is the "use it or lose it" rule. In many cases, the money you contribute does not roll over to the following year. If you do not spend the funds within the designated timeframe, you may lose them entirely.
How to apply
- Check with your employer to see if they offer an FSA.
- Review your healthcare needs to estimate how much you might spend.
- Sign up during your company's open enrollment period.
- Use your account funds to pay for eligible medical expenses.
For more information, visit: https://www.healthcare.gov/have-job-based-coverage/flexible-spending-accounts/