This content is for general informational purposes and does not constitute medical, legal, or financial advice. Healthcare rules and costs change annually. Last reviewed: January 15, 2025. Always verify current details with your insurer, employer, or a licensed healthcare navigator.
FSA (Flexible Spending Account)
A tax-advantaged account for medical expenses that doesn't require an HDHP.
Full Definition
An FSA allows you to set aside pre-tax dollars for eligible medical, dental, and vision expenses. Unlike an HSA, you don't need an HDHP to use one. However, FSA funds generally follow a 'use-it-or-lose-it' rule — unspent funds expire at the end of the plan year (some plans allow a small rollover or grace period). Your full annual election is available on day one.
Real-World Example
You elect to contribute $1,200 to your FSA for the year. On January 5th, you have surgery and use the full $1,200 from your FSA immediately, even though you haven't contributed that much yet.
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