Maximize Savings with Flexible Spending Accounts (FSAs)

There’s no doubt about it: out-of-pocket medical expenses and dependent care each year can really add up. Preschool tuition, braces for your child, adult day care, and over-the-counter medicine can easily run you several thousands of dollars. This is where a Flexible Spending Account (FSA) can help. Explore how FSAs can make managing expenses easier and more affordable!

How do FSAs work?

There are two types of Flexible Spending Accounts (FSAs): Health Care FSA for medical expenses and Dependent Day Care FSA for tuition or fees for the care of your dependents. For either type, you contribute a portion of your salary BEFORE taxes are deducted. This means you’ll save an amount equal to the taxes you would have paid on the money you set aside.

Health Care FSA

You can use your Health Care FSA funds to pay for health, dental, and vision care expenses for yourself, your spouse, and all of your dependents. The maximum contribution you can make to the Health Care FSA is $3,200 for the 2024 plan year. The maximum contribution limit may be lower depending on the specifics of your employer plan.

The Health Care FSA is 100% pre-funded. That means your entire election amount for the year is available to you the week after your first payroll deduction, regardless of how much money you have deposited into the account. If you are planning a large surgery or other large expenditure like braces, the Health Care FSA can help you to spread out the payments over the year.

Common Eligible Health Care Expenses:

• Medical co-pays
• Prescription and over-the-counter drugs
• First-aid products
• Feminine products
• Hand sanitizers and sanitizing wipes

Surprisingly Eligible Health Care Expenses:

• Sunscreen
• Baby monitors
• Electrolyte drinks
• Blemish patches
• Heating pads and massage devices

Visit the FSA Store for 2,500+ FSA eligible items.

Dependent Day Care FSA

The Dependent Day Care FSA can be used to pay for day care expenses for your qualified dependent(s) while you (and your spouse, if you’re married) are working, looking for work, or attending school full time. The maximum contribution you can make to the Dependent Day Care FSA is currently $5,000 per household for single taxpayers and married couples filing jointly, or $2,500 for married people filing separately. Married couples have a $5,000 limit, even if each has access to a separate Dependent Day Care FSA through his or her employer.

Common Dependent Day Care Expenses:

• Preschool tuition
• Before and after-school care
• Summer fun/Summer day camp
• Adult day care

How to use an FSA

The amount you decide to set aside for health care and/or dependent day care will be taken directly out of your earnings pre-tax and deposited into a special account. Depending on which options you choose, you may be able to use a provider debit card to pay for eligible expenses directly from your FSA balance or pay out-of-pocket then submit paperwork for reimbursement.