Flexible Spending Accounts (FSA) - PrimePay
Modified on: Wed, 15 Sep, 2021 at 9:50 AM
How does a healthcare FSA work?
A healthcare FSA is a flexible spending account that allows you to set aside pre-tax dollars for eligible medical, dental, and vision expenses for you and your dependents, even if they are not covered under your primary health plan.
You choose an annual election based on your plan documents and the IRS mandated maximum, which is $2,750. At the beginning of the plan year, your account is pre-funded and your full contribution is immediately available for use. Your election amount is then deducted from your paychecks in equal installments throughout the year.
How does a dependent care FSA work?
A dependent care FSA is a flexible spending account that allows you to set aside pre-tax dollars for dependent care expenses, such as daycare, that allow you to work or look for work.
You choose an annual election amount, up to $5,000 per family or $2500 if married but filing separately. The money is placed in your account via payroll deduction, in equal installments, and then used to pay for eligible dependent care expenses incurred during the plan year.
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