Flexible Spending Account (FSA)
An employer-sponsored pre-tax account for healthcare expenses. 'Use it or lose it' — funds typically forfeit if not spent by year-end.
An FSA lets you contribute pre-tax dollars to pay for qualified healthcare expenses (deductibles, copays, prescriptions, etc.). 2025 limit: $3,300 per employee. FSAs have a 'use it or lose it' provision — funds remaining at year-end typically forfeit, though plans may offer a $640 carryover or a grace period. Employers contribute too in some plans.
Frequently asked questions
What is flexible spending account (fsa)?
An FSA lets you contribute pre-tax dollars to pay for qualified healthcare expenses (deductibles, copays, prescriptions, etc.). 2025 limit: $3,300 per employee. FSAs have a 'use it or lose it' provision — funds remaining at year-end typically forfeit, though plans may offer a $640 carryover or a grace period. Employers contribute too in some plans.
Related terms
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