Are flexible spending accounts right for You?

There’s no one-size-fits-all approach when it comes to flexible spending accounts. To decide if an FSA is right for you, forecast upcoming health and dependent care expenses for the year, plus general drugstore-item spending, and become familiar with the FSA plans being offered.

What is a Flexible Spending Account (FSA)?

A flexible spending account (FSA) is a tax-advantaged way to save for future healthcare costs. You can use an FSA to pay copayments, deductibles, prescription drugs and health costs. An FSA doesn’t allow you to use funds to pay your health insurance premiums but can go toward your deductible and coinsurance.

Can a flexible spending account lower your taxes?

They can lower your taxes. A Flexible Spending Account (FSA, also called a “flexible spending arrangement”) is a special account you put money into that you use to pay for certain out-of-pocket health care costs. You don’t pay taxes on this money. This means you’ll save an amount equal to the taxes you would have paid on the money you set aside.