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 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.

What is the FSA for individuals? ›

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.

What can I spend my FSA money on? ›

You can spend FSA funds to pay deductibles and copayments, but not for insurance premiums. You can spend FSA funds on prescription medications, as well as over-the-counter medicines with a doctor's prescription. Reimbursem*nts for insulin are allowed without a prescription.

What is the biggest disadvantage of the FSAs? ›

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.

How to check if you have FSA funds? ›

Simply log in to your FSAFEDS online account at any time to manage all aspects of your Health Care FSA: Check account balances.

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.

Can I cash out my FSA? ›

Unfortunately, FSA cards cannot be used to withdraw FSA funds from an ATM. These cards can only be used on qualifying medical products and services.

Is toilet paper FSA eligible? ›

Toiletries can describe anything from oral care items like mouthwash, toothbrushes, toothpaste and floss to hair products like shampoo and conditioners; bathroom products like toilet paper; fingernail clippers, and more.

What stores can I use my Flex card at? ›

For the most part, your FSA card should work where it makes sense: at locations like pharmacies, vision centers, doctor and dentist offices, and so on. But if you try to use your card at a restaurant or bike shop, even if that bike shop happens to sell FSA eligible bandages, chances are your card won't work.

Is FSA worth the hassle? ›

Gauging whether an FSA is worth it requires carefully weighing the pros and cons. On the one hand, FSAs offer tax advantages and a way to streamline your healthcare budgeting. On the other hand, you risk forfeiting funds due to the use-it-or-lose-it rule, and your contributions and eligible expenses are limited.

Will a FSA lower my taxes? ›

A Flexible Spending Account (FSA) allows you to put aside a set amount of money from your paychecks before taxes to pay for certain specific health care or dependent care expenses, which lowers your taxable income. What is the main advantage of an FSA? The main advantage of an FSA is the tax savings it offers.

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

Contributions to HSAs are made with pre-tax dollars, are associated with high-deductible health insurance plans, and can be rolled over each year. Contributions to FSAs are also made on a pre-tax basis and cover a wider variety of activities, but you must use it or lose it each year.

Is an FSA worth it? ›

Gauging whether an FSA is worth it requires carefully weighing the pros and cons. On the one hand, FSAs offer tax advantages and a way to streamline your healthcare budgeting. On the other hand, you risk forfeiting funds due to the use-it-or-lose-it rule, and your contributions and eligible expenses are limited.

What happens to my money in an FSA? ›

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.

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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