Flexible Spending Account (FSA)
A tax-advantaged account, typically offered through an employer, used to pay for qualified medical expenses with funds that are usually use-it-or-lose-it annually.
Updated
A Flexible Spending Account (FSA) is an employer-sponsored, tax-advantaged account that allows employees to set aside pre-tax money to pay for qualified medical expenses. Unlike an HSA, FSA funds are generally subject to use-it-or-lose-it rules at the end of the plan year, with limited exceptions and grace periods.
Some employers offer a carryover of a limited amount or a grace period during which funds may still be spent, but these are plan-specific options rather than defaults.
In practice
FSAs are accessed by patients via a debit card or reimbursement claim, and billing teams treat FSA payments as standard patient payments. Eligibility and fund availability are managed by the FSA administrator, not the provider.
Commonly confused with
- Health Savings Account (HSA): An HSA rolls over from year to year and is portable across employers; an FSA is generally use-it-or-lose-it annually and is tied to the employer plan.