What is FSA Flexible Spending Account?
An FSA is a special type of account that allows employers and employees to set aside a portion of their wages before taxes for healthcare expenses.
The funds in FSA accounts can be used to pay for medical costs that are not covered by health insurance. These accounts are funded by employers and can be used to offset costs for health insurance premiums, in-network healthcare expenses, and out-of-pocket expenses.
FSA accounts are provided to employees through their employers and are part of an employee benefit. These accounts typically have an annual limit that is not specified by law but is typically between $2,000 and $5,000 per employee.
Flexible spending accounts are a type of account that allows employees to set aside a certain amount of money from each paycheck to cover qualifying expenses. The main advantage of an FSA is that it allows employees to save money on taxes. The money that is put into an FSA is not subject to income taxes, Social Security taxes, or Medicare taxes. This can lead to significant savings for employees, especially if they have a lot of qualifying expenses.
Another advantage of an FSA is that it can be used to cover a wide variety of expenses. Qualifying expenses include things like medical expenses, dental expenses, and child care expenses. This means that an FSA can be a great way to save money on a variety of different expenses.