Flexible Spending Account (FSA): Who Qualifies and What You Get
Learn how to use pre-tax money from your paycheck to cover your out-of-pocket medical expenses through an FSA.
A Flexible Spending Account (FSA) is a way to set aside a portion of your salary before taxes are taken out to help pay for medical costs.
Who it's for
You qualify for this if you are an employee and your employer offers an FSA plan as part of your benefits package.
What you get
You receive access to pre-tax dollars to pay for your out-of-pocket medical expenses. Using these funds allows you to pay for healthcare costs using money that has not been taxed, which can lower your overall tax burden.
What it costs you
To use this, you must choose your contribution amount during your employer's open enrollment period. While there is no direct fee to join, the money is deducted from your paycheck.
The catch to know
Most plans follow a "use it or lose it" rule. This means if you do not spend the money you set aside by the end of the plan year, you may lose those funds entirely, though some plans allow you to carry over a small amount to the next year.
How to apply
- Check with your employer to see if they offer an FSA plan.
- Determine how much you want to contribute during your open enrollment period.
- Submit your election through your company's benefits portal.
- Use the funds for eligible medical expenses throughout the year.
For more information, visit https://www.healthcare.gov/have-job-based-coverage/flexible-spending-accounts/