A Flexible Spending Account (FSA) is an employer-sponsored benefit account that allow you to set aside tax-free money to pay for out-of-pocket healthcare expenses. If you expect to incur medical expenses that won’t be reimbursed by another plan, FSAs are a great way to save money while covering those costs.
FSA Tax Benefits
- Save an average of 30% on qualified out-of-pocket healthcare expenses by using pre-tax dollars.
- Your full election amount is available on day 1 of the plan year – like an interest-free, tax-free loan.
|Federal Tax Rate||Annual FSA Contribution||Annual Tax Savings|
|For illustrative purposes only. Savings calculations are based on the Federal tax rate listed in the table and 7.65% FICA. Your tax situation may be different. Please consult your tax advisor.|
FSA Contribution Limits
The Internal Revenue Service (IRS) has established a 2019 maximum contribution of $2,700.
FSA Eligible Expenses
Below is a quick reference list of expenses that can be reimbursed from a Flexible Spending Account. For more detailed information, please refer to IRS Publication 502 titled “Medical and Dental Expenses,” online at irs.gov/pub/irs-pdf/p502.pdf (file will open in a new tab). For tax advice, please consult a tax or legal professional.
- Acne Treatments**
- Allergy Medicine**
- Chiropractic Care
- Cold Medicine**
- Contact Lenses & Cleaners
- Copays, Co-Insurance & Deductibles
- Dental Care
- Diabetic Supplies
- Hearing aids
- Laser Eye Surgery
- Pain Relievers**
- Pregnancy Tests
- Prescription Drugs
- Smoking Cessation Programs**
**over-the-counter (OTC) drugs and medicines (except insulin) are only eligible for reimbursement when prescribed by a physician.