What is an FSA?

An FSA, aka Flexible Spending Account, is an employee benefit that lets you stash away pre-tax income for later use on your medical expenses. The amount varies based on whether you have dependents or if you’re married, etc. Check your benefits portal or contact HR if you’re not sure if you have one or how to access it. About 43% of employees have an FSA allowance, so take a look.

Since it’s tied to your employer, it’s definitely something you want to use. Wasting your FSA allowance is like throwing a portion of your salary away. You worked hard, you earned it. So use it before you lose it.

How does an FSA work?

From the day your plan is active each year, you can withdraw your funds to pay for a ton of different health services and products. From medication to co-pays. Covid-related supplies, and even menstrual products anything for the good of your health is fair game. Some more niche FSA-approved purchases include deep massage guns and even some of the costs of buying and maintaining a service animal.

To get your benefits, you can either withdraw funds or save your receipts and get reimbursed later.

What is the difference between FSA and an HSA?

A Health Savings Account (HSA) lets you set aside pre-tax and tax-exempt money to pay for qualified medical expenses. Like a savings account, it stays there until you use it – and many even earn interest, like an investment account. Your HSA also doesn’t expire, so no deadlines. Instead, your funds roll over. And since it’s not tied to your employer, you can carry HSA funds from job to job — even after you change health insurance plans or retire.

When is the FSA Deadline?

For most employees, the deadline to use your funds is December 31st. Employers have some leeway, so make sure to double-check. But for most of us, it’s go time.

And while there was a rollover grace period during the pandemic, now, the leniency of the deadline depends on your employer. So make sure to make your FSA-eligible purchases, or request your reimbursements now!