Some employer-sponsored health plans are supplemented with a flexible savings account (FSA). An FSA is a tax-free spending account you can build up with funds specially designed for qualifying medical expenses.
There are two types of health care FSAs:
- Standard health care FSAs – funds can be used immediately and go toward eligible medical, dental, and vision care expenses.
- Limited health care FSAs – funds can be used immediately but only go toward dental and vision expenses.
Some of the benefits of FSAs include:
- Both you and your employer can choose to contribute money to the account.
- Because FSAs are owned by the employer, your total contribution for the year is available to you immediately, despite your deductions being split per pay.
- FSA funds can be applied to any qualified expenses as defined by the type of plan.
- You still can contribute funds to an FSA if enrolled in Medicare.
Other important things to know:
- FSA funds do not roll over and are on a “use-it-or-lose-it” basis. Additionally, any unspent funds return to your employer in the event of job loss, unless you enroll in COBRA coverage.
- The Internal Revenue Service sets a maximum amount that can be contributed every year to an FSA for individuals and families. For 2026, contribution limits are $3,400 for health care FSAs.
- Lists of FSA-eligible items can be found through FSA providers, IRS guidelines, and online FSA stores.
In addition to health care FSAs, some employers offer a dependent care FSA for costs such as day care, disability aid and eldercare. Eligible dependents can include your child(ren), spouse, or elderly parents. The contribution limit for 2026 is $7,500 ($3,750 per spouse for married couples filing separately).
If you have further questions about FSA plans, please reach out to your Schauer Group representative.
