We all have health care expenses. But are you spending money you don’t have to? If you were buying a pair of eyeglasses, and you could pay $70 or $100 for the exact same glasses, what would you choose to pay? $70, right?
That’s how Flexible Spending Accounts work. You put money into an FSA, and then you use that money to buy health-related items the IRS deems “eligible.” You save money by using funds that aren’t taxed. If you aren’t convinced, do the math!
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Contribution limits
A Health Care FSA allows you to save money on a before-tax basis for eligible health care expenses.
2026 limits: $3,400/year maximum
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Claim deadline
Use funds from January 1, through December 31.
Employees have 30-days from the end of the plan year to submit claims for expenses incurred during the plan year
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“Use it or lose it” rule apply?
If you don’t use the money in your Health Care FSA by the end of the plan year you will lose it. Estimate your expenses carefully.
Yes.
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Unused funds carry over?
Some plans allow you to carry over up to $500 to use the following year. (Unused funds in excess of $500 will be forfeited.) If your plan does not allow the $500 carry over, all dollars remaining in your account at the claim deadline will be forfeited.
No.
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What expenses are eligible?
Generally, eligible expenses include medical, prescription drug, dental and vision deductibles, copays and your portion of coinsurance. A complete list can be found at www.irs.gov, Publication 502.
See www.irs.gov, Publication 502.