What is a flexible spending account (FSA)?

A flexible spending account (FSA) is a form of health insurance available in Virginia. It is an employer-sponsored, tax-deferred account that allows you to set aside up to $2,700 of pre-tax income for qualified medical and/or dependent care expenses. With an FSA, you can use your money to pay for eligible medical expenses such as office visits, prescription drugs, and other medical services that are not covered by insurance. You can also use your FSA to pay for dependent care expenses such as daycare or after-school programs. FSAs make it easier to save money on taxes by allowing you to take advantage of pre-tax savings. The money you put into an FSA is not subject to federal income and Social Security taxes. In addition, you can use your FSA to buy certain over-the-counter items without a prescription, such as cold and allergy medicines, bandages, and reading glasses. It is important to note that you must use the money in your FSA within a certain time period. Generally, the money in your FSA must be used by the end of the plan year or you may lose any money that remains unused. For this reason, it is important to make sure you are accurately estimating the amount of money you need to set aside in your FSA in order to cover your eligible medical and/or dependent care expenses.

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What is a flexible spending account (FSA)?

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