What is a Flexible Spending Account (FSA)?
There are two types of FSAs: Health Care Spending Accounts and Dependent Care Spending Accounts. FSAs allow you to have money withheld from your paycheck to pay for eligible health or dependent care expenses. The money is taken out of your pay "pre-tax;" that is, before Federal and, in some cases, state taxes are withheld. Pre-tax contributions reduce your taxable income so you have less taxes withheld. When you have an eligible expense, you can submit a claim for reimbursement, essentially "paying yourself back" with tax-free dollars.

Eligible health care expenses include items such as deductibles, copayments, eyeglasses, medical supplies and more. Eligible child care expenses include the cost of care for dependent children or elderly parents that you must incur in order to be able to work. The list of FSA expenses that are eligible for reimbursement is regulated by the Internal Revenue Service, which also sets limits on the maximum amount you can contribute to a Dependent Care account.

Other aspects of an FSA plan, such as how much you can contribute to a Health Care account and how and when you can request reimbursement, vary by employer plan. If your employer offers an FSA plan, contact your benefit representative for detailed information.

The information above summarizes general employee benefit provisions. It is not intended to specify details of any particular employer's plan, nor is it a guarantee of benefits. Contact your benefit representative about specific details regarding your company's employee benefit plan.