Flexible Spending Accounts (FSA): Who Qualifies and What You Get
Learn how to use pre-tax money for medical and dependent care expenses through an FSA offered by your employer.
A Flexible Spending Account (FSA) is a way to set aside money from your paycheck before taxes are taken out to pay for specific healthcare or caregiving costs.
Who it's for
This program is available to employees whose employers offer this specific benefit as part of their compensation package.
What you get
You receive access to funds that are deducted from your pay before taxes. This "pre-tax" money can be used to cover various medical expenses or costs related to caring for a dependent.
What it costs you
Using this account requires you to plan your spending carefully because you must use the funds within the designated plan year. If you do not spend the money allocated to your account, you may lose it.
The catch to know
Unlike some other types of health savings accounts, FSA funds generally do not roll over from year to year. You must account for your expected medical and caregiving needs in advance to avoid losing your contributions.
How to apply
- Check with your employer to see if they offer an FSA.
- Determine how much money you want to contribute from your paycheck each period.
- Submit your election through your company's benefits portal or HR department.
- Keep receipts for all eligible expenses to prove they were used for qualified costs.
For more information, visit https://www.healthcare.gov/have-job-based-coverage/flexible-spending-accounts/