What is an FSA?
An FSA can be paired with any health plan and is set up and controlled by the employer. The account is funded by pre-tax payroll deferment in an amount elected during open enrollment. Participants can then use that money to pay for qualified healthcare expenses throughout the year.
FSAs truly are a “spending” account, in that participants are required to spend the funds by the end of the plan year when they are forfeited— though certain plans may have features that allow for added flexibility. Expenses must be IRS-qualified medical expenses to be eligible for reimbursement with tax-free FSA dollars.