Patrick Pham

Using a Flexible Spending Account (FSA)

People with their employer’s health plan can use funds from a Flexible Spending Account (FSA) “for copayments, deductibles, some drugs, and some other health care costs” (“Using a Flexible Spending Account (FSA)”). People can deposit money into their FSA up to a contribution limit, which may be set by their employer (Araujo 2019; “Using a Flexible Account (FSA)”). People utilize funds from an FSA by getting reimbursed for their expenses when they “[submit] a claim to the FSA (through your [their] employer) with proof of the medical expense and a statement that it has not been covered by your [their] plan” (“Using a Flexible Spending Account (FSA)”). People can benefit from FSAs, using their funds for eligible expenses, but they must follow the rules of FSAs.
FSAs offer benefits similar to benefits in a Health Savings Account (HSA), but both have their caveats. Like funds in an HSA, funds in an FSA are not taxed, “[meaning] you’ll [people will] save an amount equal to the taxes you [they] would have paid on the money you [they] set aside” (“Using a Flexible Spending Account (FSA)”). Unlike an HSA, which requires a High Deductible Health Plan, FSAs “can be used with any health plans…” (Araujo 2019). Also, whereas people keep their funds in an HSA every year, people do not retain their funds in an FSA for next year (Araujo 2019). Depending on their employer’s rules, people may only keep “up to $500” for next year (“Using a Flexible Spending Account (FSA)”). Other employers may utilize “a ‘grace period’ of up to 2 ½ extra months” allowing people “to use the money in your [their] FSA” before they lose it (“Using a Flexible Spending Account (FSA)”). Due to this rule, people should consider the amount that they should deposit into the account and the expenses that they would spend their money on (“Using a Flexible Spending Account (FSA)”). People also cannot access their FSA anymore when they switch jobs (Araujo 2019).
Despite these caveats, people can utilize their FSA for many medical and dental expenses. For instance, the money in an FSA can go towards “deductibles and copayments, but not… insurance premiums” (“Using a Flexible Spending Account (FSA)”). People can use the FSA money for any eligible procedure “that treats or prevents a dental disease,” such as cleanings, fillings, extractions, oral surgery, crowns, etc. (Whiteside 2018). People cannot spend this money on most cosmetic procedures, such as some orthodontic treatments, but “While the IRS says that some procedures treat disease and some procedures are cosmetic, there is no specific set of rules that defines the specifics regarding which procedures qualify for coverage under an FSA” (Whiteside 2018). Meaning, depending on the type of FSA, people could use the FSA funds for some orthodontic procedures (Whiteside 2018).
Like HSAs, FSAs allow people to spend untaxed money on their medical and dental expenses. While FSAs have their own caveats, they can be more accessible since they do not require a High Deductible Health Plan.
Works Cited

Araujo, Mila. “The Differences Between HSA and FSA: Which Is Better?” the balance. Last
modified April 1, 2019.
“Using a Flexible Spending Account (FSA).” Accessed April 25, 2019.
Whiteside, Eric. “Dental coverage on flexible spending account (FSA).” Investopedia. Last
modified January 4, 2018.


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