Flexible Spending Account (FSA)
Also known as a flexible spending arrangement, an FSA is a health savings account that allows you set aside a portion of pre-tax earnings to pay for qualified medical expenses. Learn more about qualified expenses from the IRS.
You'll decide how much you'd like to contribute to your FSA during your annual open enrollment. The employer will pre-fund the account and you'll have pre-tax deductions taken from your paycheck throughout the year, which will go back to the employer to cover that upfront cost.
Questions & Answers
Q: What is a Limited Purpose FSA (LPFSA)?
A: An FSA that you can only use to pay for eligible dental and vision expenses. If you have an HSA, you are not eligible for an FSA but you may take part in an LPFSA.
Q: What is a "run out period"?
A: A run out period gives you extra time to submit a claim after the plan year has ended. Claims submitted during run out period will only be taken from the previous year's funds and must to be applied to expenses incurred during the previous plan year.
Q: What is a rollover option?
A: An employer can elect to have up to $500 of employee's funds from the previous plan year to roll into the new plan year. This means that $500 of your FSA will not be lost once the plan year has ended.
Q: How much money can I contribute to my FSA?
A: In 2017, the maximum contribution to an FSA is $2,600 and $5,000 to a dependent care FSA.