Flexible Spending Account

A Flexible Spending Account (FSA) is an employer owned account that lets you set aside pre-tax dollars (which lowers your taxable income) to pay for eligible out-of-pocket expenses.

There are three types of FSAs:
1. Healthcare FSA – Can be used to pay eligible medical, dental, orthodontia and vision expenses
2. Limited Purpose FSA – Can be used in tandem with an HSA to pay eligible dental, orthodontia and vision expenses
3. Dependent Care – Can be used to pay eligible expenses for childcare, eldercare or care for a disabled dependent

Health Care FSA
• Available to employees enrolled in the PPO plans.
• Pays for out-of-pocket eligible medical, dental and vision expenses incurred by the employee, spouse or dependents.
• Deductions for a health care FSA are exempt from federal, state and local taxes.
• Only expenses NOT reimbursed by insurance can be claimed.

Limited Purpose FSA
• Available to employees enrolled in the HSA medical plan.
• Allows reimbursement of expenses that are not covered under the HSA plan, such as dental and/or vision
services.

Dependent Care FSA
• Eligible expenses include:
• Expenses paid to a dependent care center or provider for care of a dependent under age 13.
• Expenses paid for care of a dependent over age 13 who is physically or mentally incapable of caring for themselves.
• Expenses paid for elder care.

Important Notes:
• If you have elected to have money set aside in a pre-tax FSA, changes to election amounts are only permitted during open enrollment if there is a significant change in your family status (marriage, divorce, death of a spouse, birth of a child, termination of a spouse’s employment, etc.).
• If your employment ends, reimbursement of expenses incurred during your employment must be submitted within 60 days of your termination date. The IRS requires that any funds left in the account be forfeited.
• The US Department of Treasury allows a carryover of up to $680 of unused health care FSA funds remaining at the end of 2026 ($660 at the end of 2025).