Accounts you put money into that you can use to pay for certain out-of-pocket health care costs.
The IRS sets the maximum dollar amount you can elect and contribute to medical flexible spending account (medical FSA) and dependent care FSA. The FSA annual contribution limit is:
Dependent Care FSA – $5,000 per family or $2,500 if filing separately
Medical FSA
Once you elect, all of you medical FSA dollars are available for you to use the very first day of the plan year. For example, if you elect to contribute $1,200 to your medical FSA, your contributions will be deducted evenly across all of your paychecks for the year, but you have access to all $1,200 on Day 1! You can use your funds for expenses incurred by you, your spouse or eligible dependents.
Dependent care FSA
The dependent care FSA allows you to use the funds in your account as you contribute to the dependent care FSA from your paycheck. After each payroll contribution has been made, those funds are applied to your account and available for reimbursement. This is different from a medical FSA because you cannot use all of the funds Day 1.
Use or lose
Don’t forget to spend your FSA dollars. If you have not used all of your FSA dollars before the end of the plan year, you will forfeit any money left in your account. (Check with your employer to confirm how many days you have to submit claims for reimbursement after the plan year ends.)
During open enrollment, you can elect and FSA and determine how much you want to contribute. In order to make changes after open enrollment, you need to experience a qualifying life event.
Qualifying life events for any FSA:
Additional dependent care FSA qualifying life events include:
If you experience a qualifying life event, contact your employer to make changes to your election.
