A Healthcare FSA is a valuable employee benefit that allows you to have pre-tax dollars withheld from your paycheck to pay for un-reimbursed healthcare expenses. It covers not just your medical expenses, but also the expenses of your spouse and tax dependents.
Even with the best health plan, you are likely to have out-of-pocket expenses each year.
A Healthcare FSA can cover medical, dental or vision expenses that you would otherwise pay for out-of-pocket. Qualified expenses typically covered by a Healthcare FSA will include deductibles, coinsurance or copayment amounts for your health plan, eye glasses or contact lenses, dental work and orthodontia, medical equipment, hearing aids and chiropractic care.
Many over the counter items are eligible for reimbursement from a Healthcare FSA:
Your employer may limit the expenses your plan reimburses; please contact your Human Resources office for more information. For a list of IRS eligible expenses please, see Qualified Medical Expenses.
Your biggest advantage is the tax savings. Every dollar you set aside in your account reduces the amount you pay in income taxes. Plus, you can be reimbursed for qualified expenses that you are already paying for with after-tax dollars!
No. One of the main differences between the FSA and the HRA is the source of funding. HRAs are funded solely through employer contributions while FSAs are typically funded by the employee, usually through pre-tax, payroll deductions. Contact your Human Resources office for the specifics of your plan.