Flexible Spending Accounts (FSAs) for individuals | Aetna (2024)

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Flexible Spending Accounts (FSAs) for individuals | Aetna (2024)

FAQs

What are flexible spending accounts FSAs? ›

A flexible spending account (FSA) lets you set aside a portion of your earnings before tax for medical and dental expenses. It's established by an employer for employees. Employers also can contribute to employees' FSAs.

What qualifies for FSA spending? ›

You can use funds in your FSA to pay for certain medical and dental expenses for you, your spouse if you're married, and your dependents. You can spend FSA funds to pay deductibles and copayments, but not for insurance premiums.

How do FSA accounts work? ›

An arrangement through your employer that lets you pay for many out-of-pocket medical expenses with tax-free dollars. Allowed expenses include insurance copayments and deductibles, qualified prescription drugs, insulin, and medical devices. You decide how much to put in an FSA, up to a limit set by your employer.

Can an individual get an FSA account? ›

Since they are offered through your workplace, you can't get an FSA unless your employer provides one. Self-employed people aren't eligible. Once you select a certain contribution amount for the year, you can't change it. The annual contribution limit for an FSA is $3,050 in 2023.

What happens if I don't pay back my FSA? ›

If the employee fails to incur enough qualified expenses to drain his or her FSA each year, any leftover balance generally reverts back to the employer. However, there are two exceptions to the use-it-or-lose-it rule. An FSA plan can allow a grace period of up to 2 1/2 months.

Do I really need a Flexible Spending Account? ›

For example, an FSA may be a good idea if you anticipate regular medical expenses or want to lower your taxable income. However, if you rarely need medication or visit the doctor, qualify for and prefer an HSA, or worry about the use-it-or-lose-it rule, an FSA may not be the best option.

Can I buy toilet paper with my FSA? ›

Toiletries are not eligible for reimbursem*nt with a flexible spending account (FSA), health savings account (HSA), health reimbursem*nt arrangement (HRA), limited-purpose flexible spending account (LPFSA) or a dependent care flexible spending account (DCFSA).

What kind of groceries can I buy with my Flex card? ›

Groceries — a monthly spending allowance for the purchase of healthy grocery items such as fresh meats and vegetables, frozen meats, dairy items, canned goods, and more at participating stores near you.

Who is not eligible for an FSA? ›

Some employees are not eligible to enroll in an FSA. Though there are exceptions, self-employed employees and shareholders who own 2% or more in an S corporation, LLC, LLP, PC, sole proprietorship or partnership are generally ineligible for FSAs. Employees with HSAs cannot enroll in an FSA.

Can I cash out my FSA? ›

Can I Get Cash Off My FSA Card? In rare cases when you need to pay for qualifying expenses but the provider or store doesn't take your FSA card, you can use your card to withdraw cash to make the payment. However, you must keep all the documentation proving that the amount you withdrew was used for eligible expenses.

What are the disadvantages of FSA? ›

While FSAs offer several benefits, they also have limitations. The 'use-it-or-lose-it' rule can lead to the loss of unspent funds. Additionally, there are restrictions regarding eligible expenses and contribution limits, which are determined by the IRS and can change annually.

Who gets my FSA money? ›

Unused FSA money returns to your employer. The funds can be used towards offsetting administrative costs incurred during the plan year, employers can also reduce salary reductions in the next FSA year, or funds must be equally distributed to employees who enroll in an FSA for the next year.

What can I spend my FSA on? ›

If you need some inspiration to use up your FSA dollars, consider these ideas:
  • Healthcare visits. ...
  • Prescription medications. ...
  • Vision care. ...
  • Dental care. ...
  • Hearing aids. ...
  • Over-the-counter medications. ...
  • First aid supplies. ...
  • Skin care products.
Nov 29, 2023

Do I have to report my FSA on my taxes? ›

Since these salary reductions are contributions to the account and aren't included in your taxable wages on your W-2, you don't enter them as a deduction on your tax return. They may appear in Box 14 of the W-2 for informational purposes only (which you can verify with your employer).

How much money should I put into FSA? ›

You can maximize your tax savings potential by contributing the $3,050 maximum. Based on your spending, you should plan to contribute [total from dependent] toward your dependent care FSA. You can contribute [X] more and still be fully reimbursed.

What is the difference between a FSA and a HSA account? ›

HSAs and FSAs both help you save for qualified medical expenses. HSAs may offer higher contribution limits and allow you to carry funds forward, but you're only eligible if you're enrolled in an HSA-eligible health plan. FSAs have lower contribution limits and generally you can't carry over funds.

What is considered a Flexible Spending Account? ›

A Flexible Spending Account is an employee benefit that allows you to set aside money from your paycheck, pre-tax, to pay for healthcare and dependent care expenses. Unlike a Health Savings Account (HSA), an FSA is not administered by your health insurance. However, it can still help you save money on income taxes.

Can I use my FSA for someone not on my insurance? ›

Yes, the FSA does not require that your dependents be covered under your health insurance plan. You can use your account to pay for eligible health care expenses for your family, regardless of the health insurance plan in which they are enrolled.

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