PriorityFSA: Flexible spending arrangements
Save up to 40% on health care expenses with an FSA
A PriorityFSASM flexible spending arrangement (sometimes called a "flex account") could give you tax savings of up to 40% of every dollar you spend on health care deductibles, copays, dental care, braces, glasses or contacts, child care and much more.
An FSA allows you to set aside dollars you've earned before you pay taxes on them. Then you use the money in your FSA to pay for dependent care and certain health expenses that are not paid for by your health insurance plan.
Setting up an FSA
- 2 kinds of expenses, 2 FSA options. You can choose to set up either a health expense or a dependent care expense FSA, or both, depending on what your employer offers.
- HSAs and FSAs. If you have a health savings account (HSA), there are limits to the kind of FSA you can have.
- Deciding your FSA total. At the beginning of the year, you decide how much money to set aside through the year. You can use the qualified expenses list to help you estimate.
Open the list of qualified expenses.
- Set up payroll deductions. Your health expense FSA contributions are deducted from your paychecks by your employer.
- Get tax savings. The money you set aside gets transferred before state and federal income taxes are taken out of it. This reduces the taxes you pay.
A limited flexible spending arrangement (FSA, or "flex account") is a pretax, money-saving option for people who have a high-deductible health plan (HDHP) and health savings account (HSA).
When you have an HSA, you are not eligible for a traditional health expense FSA.
Features of a limited FSA
- Funds you set aside in a limited FSA are in addition to what you contribute to your HSA. You are setting more money aside before taxes.
- By using your limited FSA to pay for some of your medical expenses, you allow more of your HSA money to stay in your account and grow tax-free.
- You, your spouse and your dependents' expenses can be covered by your limited FSA.
- Your employer sets the limit of what you can contribute to your FSA.
- Just like a traditional FSA, when you don't use all the money you contribute in a plan year, you lose it when your next plan year starts.
What expenses will a limited FSA pay for?
Before you meet your health plan's deductible, you can use the limited FSA to pay for:
- Dental services: Cleanings, fillings, crowns, orthodontics
- Vision care: Contact lenses, eyeglasses, refractions, vision correction procedures
After you meet your health plan's deductible, the limited FSA can pay for any qualified expense that a traditional health care FSA can pay for, including coinsurance and copayments.
You can use it to pay for dependent care expenses at any time during your plan year.