A Health Care Flexible Spending Account (FSA) is a type of savings account that allows individuals to set aside money on a pre-tax basis to pay for qualified medical expenses. It is offered through employers and can be used to cover various out-of-pocket medical costs, such as insurance copayments, deductibles, prescription drugs, medical devices, and other eligible expenses. The money put into an FSA is not taxed, which can result in tax savings for the account holder. However, it's important to note that an FSA is a "use it or lose it" account, meaning that any unspent funds at the end of the plan year may be forfeited, although some plans may offer a grace period or a carryover provision. Employers may also have the option to make contributions to an employee's FSA, but this is not mandatory. It's worth checking with your employer for specific details about your company's FSA, including its features and how to use it
. A Health Care FSA is different from a Health Savings Account (HSA), which is another type of account that allows individuals to save for medical expenses on a pre-tax basis. Unlike an FSA, an HSA is not a "use it or lose it" account, and the funds can be rolled over from year to year. However, individuals cannot have both an HCFSA and an HSA at the same time
. In summary, a Health Care FSA is a tax-advantaged account that can be used to pay for a wide range of eligible medical expenses, providing a way to save on taxes while managing healthcare costs.
