Flexible Spending Account

(redirected from Flexible Spending Accounts)

Flexible Spending Account

An employee benefit in which an employee may contribute so much of his/her pretax income into a special account that may be used for a broad range of purposes. One may use the funds in a flexible spending account for matters such as uncovered medical expenses, life insurance premiums, or other things. Some flexible spending accounts expect the account holder to pay for these things out-of-pocket and then receive reimbursement. Others have a debit card attached to the account that the account holder may use. Flexible spending accounts are not taxed.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Flexible spending account.

Some employers offer flexible spending accounts (FSAs), sometimes called cafeteria plans, as part of their employee benefits package.

You contribute a percentage of your pretax salary, up to the limit your plan allows, which you can use to pay for qualifying expenses.

Qualifying expenses include medical costs that aren't covered by your health insurance, childcare, care for your elderly or disabled dependents, and life insurance.

The amount you put into the plan is not reported to the IRS as income, which means your taxable income is reduced.

However, you have to estimate correctly the amount you'll spend during the year when you arrange to have amounts deducted from your paycheck. Once you decide on the amount you are going to contribute to an FSA for a year, you cannot change it unless you have a qualifying event, such as marriage or divorce.

If you don't spend all that you had withheld within the year -- or in some plans within the year plus a two-and-one-half month extension -- you forfeit any amount that's left in your account.

In some plans you pay for the qualifying expenses and are reimbursed when you file a claim. In other plans, you use a debit card linked to your account to pay expenses directly from the account.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

Flexible Spending Account

A method of paying for benefits under a cafteria plan through salary reductions. Also see "Cafteria Plan."
Copyright © 2008 H&R Block. All Rights Reserved. Reproduced with permission from H&R Block Glossary
References in periodicals archive ?
All products included in the program are also eligible for flexible spending accounts or health saving accounts.
Company-provided dependent care flexible spending accounts have declined eight percentage points since last year.
The acquisition is expected to give HealthEquity access to more of the fast-growing HSA market by expanding its direct distribution to employers and benefits advisors as a single source, premier provider of HSAs and complementary CDBs, including flexible spending accounts, health reimbursement arrangements, COBRA administration and commuter accounts.
The firm expanded its benefit administration offerings in 2018 with the acquisitions of Chard Snyder and Benefit Planning Consultants, Inc., which provide consumer-directed healthcare administration (e.g., health savings accounts, flexible spending accounts, and health reimbursement accounts) and benefit continuation services (e.g., Consolidated Omnibus Budget Reconciliation Act and retiree billing administration).
The costs of these products may be eligible for flexible spending accounts or health saving accounts, according to the release.
* Flexible spending accounts are not as prevalent as they once were: 63% of employers currently offer FSAs, down from 69% in 2015.
Webster's HSA Bank division offers a comprehensive consumer-directed healthcare solution that includes health savings accounts, health reimbursement arrangements, flexible spending accounts and commuter benefits.
Other employee benefits include: Paid vacation, personal day and holidays, flexible spending accounts and health and wellness initiatives.
On average, companies report farming out 40% of their benefits functions, most commonly for employee assistance programs (77%); flexible spending accounts (FSAs) (69%); COBRA [Consolidated Omnibus Budget Reconciliation Act] (64%); retirement benefit payments (56%); and pharmacy benefits administration (53%).
Flexible spending accounts are hybrid accounts with a revolving component as well as a charge component.
Flexible Spending Accounts (FSAs) are voluntary, account-based plans used by millions of Americans to manage their health care needs.

Full browser ?