Flexible Spending Accounts (FSAs)

Flexible Spending Accounts (FSAs) allow you to pay for eligible expenses using tax-free dollars. Note: There is a “use it or lose it” rule imposed by the IRS. Estimate carefully!

If you don’t spend all the money in your Healthcare or Limited Purpose account, unused funds ranging between $100 to $680 roll over to the following year. If unused funds are less than $100, participation in the following plan year is required for the funds to roll over. Any unused funds over $680 will be forfeited.

Dependent Care account expenses must be incurred from January 1 – December 31, and any additional remaining balance will be forfeited.

All claims for Healthcare, Limited Purpose, and Dependent Care expenses need to be submitted by March 31 for the prior plan year.

How Much Could You Save?

Flexible Spending Accounts (FSAs) are one of the easiest ways to reduce your taxable income and keep more of what you earn. When you contribute to an FSA, the money you set aside for eligible healthcare expenses is not taxed—meaning every dollar goes further. For example, let’s say Tom sets aside $2,000 in his FSA for the year. Normally, he’d pay $560 in federal income tax, $100 in state income tax, and $153 in FICA taxes on that amount. But by using his FSA, Tom avoids all those taxes and saves $813. That’s money he can use for things like doctor visits, prescriptions, or medical supplies—without it ever being taxed. FSAs don’t just help with budgeting—they help you make the most of your paycheck.

Healthcare FSA

Contribute up to $3,400 per year, pretax, to pay for eligible medical, dental, and vision expenses.

Limited Purpose FSA

Those enrolled in the HDHP can contribute up to $3,400 per year, pretax, to pay for eligible vision and dental expenses.

Remember: If you or your spouse are enrolled in a high deductible health plan (like our 2026 Anthem HDHP), you can only participate in the Limited Purpose FSA for dental and vision expenses.

Dependent Care FSA

Contribute up to $7,500 per year, per household ($3,750 if married and filing separate tax returns), pretax, to pay for daycare expenses associated with caring for elder or child dependents that are necessary for you or your spouse to work or attend school full-time. You cannot use your Healthcare FSA to pay for Dependent Care expenses.

Using Your Account

Eligible Expenses
You may use your FSA funds to cover eligible medical, dental, vision expenses.

Your Debit Card
Use the debit card linked to your FSA to cover eligible expenses or pay for expenses out of your own pocket and save your FSA money for future healthcare expenses.

Without an FSA, Tom Would Pay

28% in federal income tax: $560 savings
5% in state income tax: $100 savings
7.65% in Federal Insurance Contributions Act (FICA) tax: $153 savings

His total tax savings for the year with an FSA: $813

By using an FSA, Tom reduces his taxable income—and saves $813 for the year.