Flexible Spending Account (FSA)
What is an FSA and How Does It Work?
A Flexible Spending Account (FSA) lets you set aside pre-tax dollars from your paycheck to cover eligible healthcare expenses, reducing your taxable income and potentially saving you money. At the start of the plan year, you decide how much to contribute, and the full amount is available to you immediately, even if you haven’t deposited it all yet. This can be a great way to manage large or unexpected medical costs.
Benefits of an FSA and Eligible Expenses
FSAs are incredibly versatile, covering a wide range of healthcare expenses, including copayments, deductibles, prescription medications, and some over-the-counter items. You can also use your FSA for dental and vision care, like glasses, contact lenses, and orthodontics. This flexibility makes it easier to handle out-of-pocket costs and take control of your healthcare spending.
Using Your FSA and Planning Ahead
You can use your FSA by paying directly with an FSA debit card or by submitting claims for reimbursement. Remember, FSAs typically have a “use-it-or-lose-it” rule, so it’s important to carefully estimate your expenses when choosing your contribution amount. By planning ahead and understanding what expenses are eligible, you can maximize the benefits of your FSA and manage your healthcare costs effectively.