Flexible Spending Accounts
What is a Flexible Spending Account (FSA)?
A Flexible Spending Account is an employer-sponsored benefit that allows you to pay for eligible medical expenses on a pre-tax basis. If you expect to incur medical expenses that won’t be covered by your regular health insurance plan, you should consider taking advantage of your employer’s FSA, if one is offered.
What are the benefits of an FSA?
FSA saves you money by reducing your income taxes. The contributions you make to a Flexible Spending Account are deducted from your pay BEFORE your Federal, State, or Social Security Taxes are calculated and the contributions are never reported to the IRS. The end result is that you decrease your taxable income and increase your spendable income. You can save hundreds or even thousands of dollars a year. As you incur medical expenses that are not fully covered by your insurance, you submit a copy of the Explanation of Benefits or the provider’s invoice and proof of payment to the plan administrator, who will then issue you a reimbursement check.
What expenses are eligible?
The IRS considers certain items eligible for reimbursement under health care flexible spending accounts. Laser Vision Correction is currently and eligible expense under the IRS guideline. You can access this information through IRS Publication 502, available at www.irs.gov or by phone at (800) TAX-FORM. Keep in mind that the IRS and/or your employer may modify its list of eligible expenses. If you are unsure if an expense is eligible, refer to your employer’s FSA documents.