Flexible Spending Accounts (FSAs)
Helping Employees maximize their healthcare dollars
An FSA is a great tool to help employees set aside money, pre-tax, for healthcare and dependent expenses, while also allowing the employer to avoid payroll taxes (7.65% for Medicare and Social Security) on employee and employer contributions. Medical and Limited Purpose FSA dollars are available to employees immediately which helps with unexpected medical expenses. The money in any FSA type must be used by the end of the plan year – however some employers offer either a limited rollover amount (up to $570 for 2022) or a grace period ( 2-1/2 months) that allows employees to have extra time to spend unused FSA dollars.
Types of FSAs and Eligible Expenses
Medical FSA |
Limited Purpose FSA |
Dependent Care FSA |
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| What Does it Cover? |
Covers many medical items including:
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Covers many dental, vision and preventative items including:
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Covers:
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| Who is Eligible? |
Employee and employee’s IRS eligible dependents. |
Employee and employee’s eligible dependents. |
Employee’s IRS eligible dependents age 12 and under and Disabled IRS eligible dependents of any age who are unable to care for themselves. |
| What are the requirements? |
Account is only offered through employers. Contributions to a Health Savings Account (HSA) are not allowed if an employee has a medical FSA. |
Account is only offered through employers. HSA owners can have a Limited Purpose FSA. |
To be eligible for a dependent care FSA, both the employee and their spouse (if applicable) must work, be looking for work or be full-time students. |
Paying for Expenses
Employees may use the payment debit card to pay for FSA eligible expenses or pay out of pocket and request a distribution from the online account or mobile app. It is easy to sign up for text alerts to stay up to date on account activity.