A Flexible Spending Account (FSA) is an employer-sponsored benefit that allows employees to set aside a portion of their pre-tax earnings to pay for qualified medical expenses. There are different types of FSA accounts, including Health Care FSA (HCFSA), Limited Expense Health Care FSA (LEX HCFSA), and Dependent Care FSA (DCFSA). The funds in an FSA can be used for various out-of-pocket medical expenses, such as insurance copayments, deductibles, prescription drugs, and dependent care expenses. Any money left in the account at the end of the year may be subject to either a grace period or a carryover option, as determined by the employer. FSAs are not administered by health insurance and can help individuals save on income taxes. It's important to note that an individual cannot have both a Health Care FSA and a Health Savings Account (HSA) at the same time
. For more details about the specific rules and regulations governing FSAs, individuals should consult their employer or the Internal Revenue Service (IRS).
