Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) enable you to set aside pre-tax funds, sometimes directly from your wage, to cover qualified medical expenses.
If this card is lost or stolen, you may not have the same protections as if it were a debit card from your bank or credit union.
What Is Flexible Spending Accounts?
A Flexible Spending Account is a special account used to pay for certain out-of-pocket medical expenses. You owe no taxes on this amount. This means that you will save the amount of taxes you would have paid on the money set aside.
Employers may contribute to your FSA, but it is not required. With an FSA, you submit a claim to the FSA (through your employer) along with documentation of the unreimbursed medical expense. The expenses will then be reimbursed. Ask your employer for instructions on how to use your FSA.
Throughout the year, you can withdraw funds from the account to reimburse yourself for eligible expenses you’ve paid. FSAs can help you save money because contributions are deducted from your paycheck before federal taxes are withheld. This reduces the amount of your taxable income.
Read more: Lost Social Security Card? Here’s What to Do to Prevent Losing Your Money!
Difference Between FSA and HSA
Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs) are both pre-tax accounts used to pay for qualified medical expenses.
In contrast to health savings accounts (HSAs), flexible spending accounts are frequently used in conjunction with traditional health insurance. In order to open an HSA account and make contributions, the account holder must have high-deductible health insurance.
FSAs are “prefunded” by the employer, meaning that the employee has near-immediate access to the entire amount of funds that the employee would contribute throughout the year in small increments.
Read more: SNAP Benefits 2023: Can Illegal Immigrants Receive Food Stamps? Here’s What You Need to Do!