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Health FSA Health FSAs, more commonly known as medical flexible spending accounts, are accounts that are funded by employee salary deferrals or contributions. The money is placed in the account in order to pay for a variety of medical expenses on a tax-exempt basis. Typically, the minimum and maximum amounts of money that can be placed into these accounts is at the discretion of the individual's employer. How a Health FSA Works Choosing the amount to contribute to one's health FSA is a crucial decision. It is important to take the time to study your personal and family health needs before making this decision. Any money left over on the account at the end of the year has to be forfeited, which is why it is rarely a good idea to choose this figure randomly. Once the amount of the contribution has been decided upon, the appropriate amount is deducted from the employee's paycheck every pay period. The money that is deducted is tax-exempt, meaning that the full amount goes into the health FSA. This has the secondary advantage of lowering the total salary to be taxed, thus providing additional financial savings. Health FSAs from take care can be used to pay for a wide range of medical expenses. Deductibles, co-pays, prescription medication, dental, vision and even certain over the counter medications typically qualify. This allows individuals a great deal of flexibility when it comes to managing their own health care needs. |
Additional Topics Consumer-Directed Health Plans Consumer-Driven Health Accounts Dependent Care Flexible Spending Accounts Flexible Health Spending Accounts Flexible Medical Expense Accounts Health Care Flexible Spending Accounts Health Reimbursement Arrangements IRS Section 125 Cafeteria Plans Medical Expenses and Income Tax Plan for Medical that Health Insurance Doesn't Cover Save 25% to 40% on Health Expenses Save on Co-Pays and Over-the-Counter Medications Save on LASIK and Orthodontic Costs Section 125 Plan Administration |
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