Understanding Your FSA Account
What is an FSA?
A Flexible Spending Account(FSA) is a tax-advantaged account that allows you to use pre-tax dollars to pay for qualified medical or dependent care expenses. You choose how much money you want to contribute to an FSA at the beginning of each plan year and can access these funds throughout the year. This contribution is subject to certain legal limits.
- Multiple uses:There are hundreds of eligible expenses for your FSA funds, including prescriptions, some over- the-counter items, doctor office copays, health insurance deductibles and coinsurance. FSA funds may even be used for eligible expenses for your spouse or federal tax dependents.
- Easy to access:Funds in the account are easily accessed with the payment card. Your account balance is available at any time online, through the mobile app, or over the phone.
- Tax advantages:Since FSA contributions are not taxed, you can reduce your taxable income by the amount you contribute to your FSA. You can then use those pre-tax dollars to pay for eligible health care expenses that would have otherwise been paid with post-tax dollars.
- Rapid reimbursements: Paying for health care expenses is easy when you use your payment card. If your card is not processable with our credit card system, you can quickly and easily create a claim online after paying out of pocket. Once you submit your receipts, your FSA company will reimburse you via check or direct deposit.
Withdrawing from an FSA
Depending on your FSA and administration, you’ll have a couple of different options for withdrawing money for eligible expenses. You’ll want to talk with your administrator to find out how this will specifically work for you. Here are the most common options:
- Debit/Check: Some accounts come with a debit cardor book of checks attached to the account so you can spend straight from the FSA for allowed expenses. This is a convenient option, for sure. However, the card may not always work because it will restrict where you can spend and which items you can spend on, according to your plan’s limits.
- Reimbursement:All FSA’s offer reimbursement as one option — if not the only option. With some FSA’s, you may need to spend out-of-pocket and then file a receipt with your plan administrator. The plan with then either send a direct deposit to your personal checking account or a check in the mail, reimbursing you for the funds spent.