People with coverage through a job
Using a Flexible Spending Account (FSA)
If you have a health plan through a job, you can use a Flexible Spending Account (FSA) to pay for health care costs, like
,
,
, and some drugs. They can lower your taxes.
How Flexible Spending Accounts work
A Flexible Spending Account (FSA, also called a âflexible spending arrangementâ) is a special account you put money into that you use to pay for certain out-of-pocket health care costs.
You donât pay taxes on this money. This means youâll save an amount equal to the taxes you would have paid on the money you set aside.
Employers may make contributions to your FSA, but they arenât required to.
With an FSA, you submit a claim to the FSA (through your employer) with proof of the medical expense and a statement that it hasn't been covered by your plan. Then, youâll get reimbursed for your costs. Ask your employer about how to use your specific FSA.
To learn more about FSAs:
- Contact your employer for details about your companyâs FSA, including how to sign up.
- Get details from the IRS in this publication (PDF, 1.22Â MB).
Facts about Flexible Spending Accounts (FSA)
- They are limited to $3,200 per year per employer. If youâre married, your spouse can put up to $3,200 in an FSA with their employer too.
- You can use funds in your FSA to pay for certain medical and dental expenses for you, your spouse if youâre married, and your dependents.
- You can spend FSA funds to pay deductibles and copayments, but not for insurance premiums.
- You can spend FSA funds on prescription medications, as well as over-the-counter medicines with a doctor's prescription. Reimbursements for insulin are allowed without a prescription.
- FSAs may also be used to cover costs of medical equipment like crutches, supplies like bandages, and diagnostic devices like blood sugar test kits.
- Get a list of generally permitted medical and dental expenses from the IRS.
- You canât use a Flexible Spending Account with a Marketplace plan.
- Instead, a similar product, called a , allows you to set aside money on a pre-tax basis to pay some health expenses if you have a âhigh deductibleâ Marketplace health insurance plan. Learn more about Health Savings Accounts.
- Instead, a similar product, called a
FSA limits, grace periods, and carry-overs
You generally must use the money in an FSA within the plan year. But your employer may offer one of 2 options:
- It can provide a "grace period" of up to 2 œ extra months to use the money in your FSA.
- It can allow you to carry over up to $640Â per year to use in the following year.
Your employer doesnât have to offer these options. If it does, it can be either one of these options, but not both.