Flexible Spending Account

A flexible spending account (also known as flexible spending arrangement) is a tax-advantaged account obtainable through the workplace that allows employees to put money into their account in order to pay for qualified out-of-pocket dependant care expenses with pretax currency. The employee will save the amount of money he or she would otherwise have paid in taxes on the money in the flexible spending account. Flexible spending accounts are used as a method of lowering out-of-pocket heath care costs for select medications, deductibles, co-payments, and some other miscellaneous health care expenses. An employee’s contribution is limited to $2,550 per year.

How Flexible Spending Accounts Work

Prior to each year or annual open-enrollment period, a person must determine how much money he or she will contribute to the ...

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