Define: Fsa

An FSA, or Flexible Spending Account, is a tax-advantaged savings account offered by employers that allows employees to set aside pre-tax dollars to pay for eligible medical expenses.

The maximum contribution limit for an FSA is determined by the IRS and may change each year. For 2021, the maximum contribution limit is $2,750.

Eligible expenses include medical, dental, and vision expenses that are not covered by insurance, such as co-pays, deductibles, prescription medications, and certain over-the-counter items. However, it’s important to review your specific FSA plan documents for a comprehensive list of eligible expenses.

Generally, cosmetic procedures are not eligible for reimbursement from an FSA unless they are medically necessary and prescribed by a healthcare professional. It’s best to consult your FSA plan documents or contact your FSA administrator for specific guidelines.

Traditionally, any unused funds in an FSA at the end of the plan year are forfeited. However, some employers offer a grace period or a carryover option, allowing employees to use the remaining funds for a certain period or carry them over to the next plan year. Check with your employer or FSA administrator for details.

Yes, you can use your FSA funds to pay for eligible medical expenses incurred by your dependents, such as your spouse or children, even if they are not covered by your health insurance plan.

Yes, certain alternative therapies may be eligible for reimbursement from an FSA if they are prescribed by a healthcare professional to treat a specific medical condition. However, it’s important to review your FSA plan documents for any specific restrictions or requirements.

No, FSA funds cannot be used to pay for health insurance premiums. However, there are other tax-advantaged accounts, such as Health Savings Accounts (HSAs), that may allow for this.

Generally, you can only change your FSA contribution amount during your employer’s open enrollment period or if you experience a qualifying life event, such as marriage, divorce, birth, or adoption of a child. Check with your employer or FSA administrator for their specific rules and procedures.

If you change jobs, you may lose access to your FSA unless your new employer offers a similar benefit. However, you may be eligible for COBRA continuation coverage, which allows you to continue using your FSA funds for a limited period. It’s important to consult your employer or FSA administrator for guidance in such situations.