Flexible Spending Account
A Flexible Spending Account (FSA) is an employer owned account that lets you set aside pre-tax dollars (which lowers your taxable income) to pay for eligible out-of-pocket expenses. There are three types of FSAs:
- Healthcare FSA – Can be used to pay eligible medical, dental, orthodontia and vision expenses
- Limited Purpose FSA – Can be used in tandem with an HSA to pay eligible dental, orthodontia and vision expenses
- Dependent Care – Can be used to pay eligible expenses for childcare, eldercare or care for a disabled dependent
Use It or Lose It
Carefully estimate your out-of-pocket expenses when determining your pre-tax contribution to an FSA. The IRS requires any balance remaining at the end of the plan year to be forfeited back to AMU to defray administrative expenses related to the plan.
There is a two-and-a-half month grace period for the Healthcare FSA and Limited Purpose FSA. Dependent Care FSA funds must be used before the plan year ends.
2023 Maximum Contribution (Pending IRS approval) |
|
---|---|
Health Care FSA |
$3,200 |
Limited Purpose FSA |
$3,200 |
Dependent Care FSA |
$5,000 |