Health Plan Flexible Spending Account

Health Plan Flexible Spending Account

A structure in which an employee makes tax-free contributions to a special account that can be used for medical expenses not reimbursed by his/her ordinary health insurance. One may use funds in the account to make premium payments or to pay for unexpected expenses. A flexible spending account helps reduce one's risk of being underinsured. However, if one does not spend everything in the account by the end of a calendar or fiscal year, the remainder reverts to one's employer. See also: Health savings account.
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Treasury Department and the Internal Revenue Service (IRS) that will allow consumers to buy over-the-counter medications with pre-tax dollars through their health plan flexible spending accounts (FSAs).
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