Most Popular Questions
What is a Flexible Spending Account?
A Flexible Spending Account (FSA) is a tax-favored program offered by employers that allows their employees to pay for eligible out-of-pocket health care and dependent care expenses not covered by your health care plan with pre-tax dollars. The money you contribute to an FSA is not subject to payroll taxes, so you end up paying less in taxes and take home more of your paycheck each year.
With an FSA, you reduce your taxes and get more for your money by saving an average of 30% on eligible, out-of-pocket health care and dependent care expenses.
The Federal Flexible Spending Account Program (FSAFEDS) offers three types of FSAs:
Health Care FSA - A Health Care FSA (HCFSA) is a pre-tax benefit account that's used to pay for eligible medical, dental, and vision care expenses - those not covered by your health care plan or elsewhere. It's a smart, simple way to save money while keeping you and your family healthy and protected. Plus, if you re-enroll in FSAFEDS during Open Season, you can carry over up to $500 remaining in your account from one plan year to the next, so there's no "use or lose" risk.
Limited Expense Health Care FSA - If you're enrolled in an HSA-qualified high-deductible health plan and have a Health Savings Account (HSA), you can maximize your savings even more with a Limited Expense Health Care FSA (LEX HCFSA). This pre-tax benefit account helps you save on eligible out-of-pocket dental and vision expenses not covered by your health care plan while taking advantage of the long-term savings power of an HSA. Plus, if you re-enroll in FSAFEDS during Open Season, you can carry over up to $500 remaining in your account from one plan year to the next, so there's no "use or lose" risk.
Dependent Care FSA - A Dependent Care FSA (DCFSA) is a pre-tax benefit account used to pay for eligible dependent care services, such as preschool, summer day camp, before or after school programs, and child or adult daycare. It's a smart, simple way to save money while taking care of your loved ones so you can continue to work. In addition, the DCFSA includes a grace period that allows extra time to incur expenses after the plan year ends.
To learn more, see Explore Your Options