Flexible Spending Accounts (FSAs)
FSAs allow you to set aside pre-tax dollars to pay for eligible health and dependent care expenses. Each year, you must elect the annual amount you want to contribute to one or both accounts. Your contributions will be deducted pre-tax from your paycheck which can help reduce your taxable income.
Health Care FSA
Health plan deductibles, copays, coinsurance, and prescriptions, including dental and vision hardware and expenses
Limited Purpose FSA
Dental and vision expenses only
Dependent Care FSA
Daycare for children age 12 and under, disabled children, and dependent adults
Rules to Keep in Mind
Expenses must be incurred during the plan year to be eligible.
IRS requires a strict “use it or lose it” rule—any unused funds are forfeited at year-end.
Contributions can only be changed if you experience a qualified life event.
Health Care FSA and Dependent Care FSA funds cannot be combined or transferred.
If employment ends, only expenses incurred before termination are eligible unless COBRA is elected for a Health Care FSA.
Juggling Work & Family?
With a Dependent Care FSA, you can use pre-tax dollars to pay for daycare, preschool, after-school programs, and even elder care. These benefits make it easier to balance family responsibilities while working or going to school full time.
