Flexible Spending Accounts (FSAs) are a type of benefit offered by many employers that allow employees to set aside a portion of their pre-tax income to be used for qualified medical expenses. This can save employees money by reducing their taxable income and lowering their overall tax burden.
FSAs are a great option for people who have regular medical expenses, such as prescription medications, co-pays, and other out-of-pocket costs. The funds in an FSA are accessed through a debit card or by submitting receipts for reimbursement.
One thing to keep in mind with FSAs is that the funds in the account must be used within the plan year, or they will be forfeited. This is known as the “use it or lose it” rule. However, some plans may allow employees to carry over a certain amount of unused funds into the next year, or offer a grace period in which employees can use the funds after the plan year ends.
Employees should carefully consider their anticipated medical expenses when deciding how much to contribute to an FSA. It’s important to not over-contribute and risk losing funds, but at the same time, maximizing the use of an FSA can provide significant savings.
Overall, FSAs can be a valuable tool for reducing medical expenses and saving money on taxes. Employees should take the time to understand their FSA options and consider enrolling in an FSA if it makes financial sense for their situation.
And there are some surprisingly eligible items. Check out what we got with our FSA below.
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