On day 4 of benefits month, we’re covering FSA’s for Medical Insurance that can help you pay for out-of-pocket medical expenses with tax-free dollars. It’s important to note that generally, the money in your FSA must be used within the plan year.
FSA Medical Information Overview
- FSA for medical can be used with low-or high-deductible health insurance plans
- FSA is an employer owned account; which means you forfeit the balance if you don’t use it
- Generally, you must use the money in your FSA within the plan year. Some employers may offer two options:
- Provide a “grace period’ of up to 2 1/2 extra months to use the money in your FSA
- Allow you to carry over up to $550 per year to use in the following year
- Note, your employer is not required to offer these options
- Contributions to an FSA can only be completed via payroll. Contributions are excluded from payroll tax and income tax
- 2021 contribution limit is $2,750. The 2022 limit is not available yet
- Cannot invest funds
- Eligible medical expense withdrawals are tax-free
- FSA funds can be used to pay certain out-of-pocket qualified medical expenses