What is a FSA?

A Flexible Spending Account is a special account you put money into that you use to pay for certain out-of-pocket health/dependent care costs.

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You don’t pay taxes on this money. This means you’ll save an amount equal to the taxes you would have paid on the money you set aside.

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What can I use it for?

You can use funds in your FSA to pay for certain medical and dental expenses for you, your spouse if you’re married, and your dependents.

• You can spend FSA funds to pay deductibles and co-payments, but not for insurance premiums.

• You can spend FSA funds on prescription medications, as well as over-the-counter medicines with a doctor's prescription. Reimbursements for insulin are allowed without a prescription.

• FSAs may also be used to cover costs of medical equipment like crutches, supplies like bandages, and diagnostic devices like blood sugar test kits.

• You can also spend FSA funds on costs related to dependent care such as daycare. 

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What happens if I don't use all of the money set aside?

You must use the money in an FSA within the plan year. But you have a "grace period" of up to 2 ½ extra months to use the money in your FSA into the next calendar year. 

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At the end of the year or grace period, you lose any money left over in your FSA. So it's important to plan carefully and not put more money in your FSA than you think you'll spend within a year on things like copayments, coinsurance, drugs, and other allowed health care costs.

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