Federal Flexible Spending Account Explained
If a medical curveball comes your way, federal employees can count on their Federal Flexible Spending Account (FSAFEDS) to help. On average, employees can save up to 30% by taking advantage of this benefit. Federal Educators explains how a federal employee can maximize their savings through this smart and simple way that saves money and keeps families healthy.
What is it?
A Federal Flexible Spending Account (FSAFEDS) is part of the federal employee benefit program that allows employees to set aside a certain amount of money on a pre-tax basis. This account can be used for eligible health or dependent care expenses. There are three types of accounts under the FSAFEDS umbrella: Health Care FSA, Limited Expense Health Care FSA and Dependent Care FSA.
How does the FSAFEDS work?
At each pay period, a predetermined amount is automatically deducted from your paycheck before taxes are taken out. You can use these funds to pay for eligible health or dependent care expenses throughout the plan year. The types of services or products that qualify depend on which FSA account you have.
What types of FSAFEDS accounts are there?
There are three FSAFEDS account programs available. Each program has different options so make sure to explore which one works best for your family’s lifestyle before committing. A Health Care FSA is used primarily to pay for eligible medical, dental and vision care expenses that are not covered by your health care plan. Pros to this plan include the ability to access the full amount of your account on day one of the FSAFEDS plan year and carry over up to $570 from one plan year to the next when you re-enroll. Aside from no “use or lose” risk, this is especially helpful for planning out medical procedures. A Limited Expense Health Care FSA can be used to pay for qualified out-of-pocket dental and vision care expenses. It carries the same pre-tax benefits as the Health Care FSA but also adds the long term savings of an HSA account. The last option is the Dependent Care FSA, which is used to pay for qualified out-of-pocket dependent care expenses like preschools, school programs, summer day camps and child or adult daycare.
If you feel overwhelmed with your FSA benefit options, Federal Educators can help. Together, we can create a benefits plan that works for your family. Give our Tampa office a call at (813) 544-2908 to get started today!