What Is a Health Care Flexible Spending Account?

A Health Care Flexible Spending Account (HCFSA) lets you to set aside before-tax money to use for certain eligible expenses not covered by your health plans.

Your HCFSA reduces how much you pay in taxes because your contributions are taken out of your paycheck pre-tax and do not count toward your taxable income (that is, the contributions are “before-tax”). HCFSAs also spread health care costs throughout the year, with access to the full annual election amount up front. Contributing money from every paycheck can make it easier to pay out-of-pocket health care expenses such as prescriptions, copays and deductibles.

Because you forfeit unused funds in your HCFSA above $550 at the end of the year, estimating your eligible health care expenses for the year and how much to contribute to your HCFSA are key.

Good to know: The amount you elect to contribute to an HCFSA is available as of January 1 even before you have contributed the full amount.

This entry was posted in . Bookmark the permalink.

close