A Healthcare Flexible Spending Account is an account that employees may setup through their employer to save money on qualified health care expenses.
With an FSA also known as a Flexible Spending Account, you elect to have your annual contribution deducted from your check each pay period in equal installments throughout the year, until you reach the yearly maximum you have specified. The amount of your pay that goes into an FSA will not count as taxable income, so you will have immediate tax savings. FSA dollars can be used during the plan year to pay for qualified expenses and services. There are three types of Flexible Spending Accounts, these include:
With all types of FSAs, you’ll receive access to a secure, easy-to-use web portal where you can track your account balance, view your claims history and submit requests for reimbursements.
An FSA is a great way to pay for expenses with pre-tax dollars.
A Flex Spending Account for health care – or Healthcare FSA – could save you money if you or your family members:
Before you enroll, you must first decide how much you want to contribute to your account(s). This is called your annual election amount. You will want to spend some time estimating your anticipated eligible medical and dependent care expenses for the year, but know that you don’t have to worry about losing unused funds (up to $610, if your Employer allows, may be carried over to the next plan year).
Throughout the year, you’ll likely find yourself with expenses for yourself and your family that insurance won’t cover. By taking advantage of an FSA, you can actually reduce your taxable income and reduce your out-of-pocket expenses when you use your Flexible Spending Account to pay for the things you’d purchase anyway.
Allowable healthcare expenses are those medical, dental and other healthcare costs which are generally deductible on Schedule ‘A’ of Form 1040, without regard to the exclusion of 10% of Adjusted Gross Income. An employee will be reimbursed up to the employer’s specified election amount.
We have this handy resource index of common items and whether they are FSA approved.
Visit our Resource Center for additional information on FSA’s including:
If you have questions, please give us a call or contact us online. We will be happy to assist you.
Learn how to maximize your Harrison Group benefit accounts. Check out Eligible Expenses, Browse FAQs, View Videos, FSA Calculators, and more!
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