Flexible Spending Accounts
A Flexible Spending Account (FSA) is like a personal savings account set aside specifically to pay eligible expenses for you and your family. You set up an FSA through your employer.
The two main types of FSAs are:
- a health care FSA, for eligible medical, dental, vision and hearing expenses; and
- a dependent care FSA, for eligible expenses to care for a dependent child or a dependent adult who is incapable of self-care.
You contribute to an FSA throughout the year by payroll deduction. The money you deposit is deducted from your salary on a pre-tax basis immediately reducing your taxable income. To use the money in the FSA, you file claims for eligible expenses through your employer for reimbursement. Money left in your FSA account on the claims filing deadline is forfeited.
For a free FSA kit that employers can use to help set up these accounts, to communicate the plans and to enroll employees, please call MMBB at 800.986.6222.
These two calculators can help you decide how much to contribute to a Dependent Care Flexible Spending Account (FSA) and/or a Health Care Flexible Spending Account (FSA). Although health care expenses can be difficult to predict, these modelers can help you make reasonable estimates to avoid any unused funds being forfeited. To help decide how much to set aside into an FSA, try our: