With a Health Care Flexible Spending Account (Health Care FSA), you set aside pretax dollars through automatic paycheck deductions — and reduce your taxable income in the process. Your contributions can be used to pay for doctor visits, prescription drugs, over-the-counter medications, and dental and vision expenses. That’s what’s called a win-win.
How It Works
With an FSA, money is deducted from your paycheck before taxes and put into an account you can draw from to pay for eligible expenses. Because contributions come out of your pay before taxes are figured, your taxable income is reduced. As a result, you pay less in taxes and bring home more in each paycheck.
You can contribute between $100 and $3,050 of pretax money from your paycheck annually to pay (and reimburse yourself) for eligible out-of-pocket medical, prescription drug, dental and vision expenses not covered by another health care plan. Keep in mind that you can carry over up to $500 of unused Health Care FSA funds from year to year.
Note: In general, if you use a Health Care FSA for medical expenses, you can’t participate in the HDHP with HSA medical plan option and contribute to a Health Savings Account (HSA). Instead, you can enroll in the Limited Purpose FSA.
Managing Your Account
Everything related to your FSA can be done through the Smart-Choice website (available through Benefits In-site). There’s even an app for your mobile phone. Simply download “Smart-Choice Mobile” on the App Store or Google Play Store, and then use the app to:
- view your account balance and other account information;
- submit claims for reimbursement;
- upload photos of expense receipts; and
- get alerts about actions you need to take.