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 $3,200 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 $610 of unused Health Care FSA funds from year to year.
Note: If you participate in the HDHP and contribute to a Health Savings Account (HSA), you cannot also enroll in a Health Care FSA. Instead, you can enroll in a Limited Purpose FSA and use the funds for eligible dental and vision expenses. You can use funds for qualified medical expenses once you meet the medical plan deductible.
For a full list of Health Care FSA eligible expenses, view Publication 502 on the IRS website.
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.