a The FSA Flexible Spending Account in short is an account where employees in United State They are eligible to set aside a certain amount of pre-tax money from their paycheck to cover dental and medical expenses that are outside the scope of their health insurance coverage.
According to federal reports, about 16 million American workers contribute to their FSA accounts.
However, the onset of the pandemic has seen the government relax rules around FSA accounts, under the COVID Tax Relief Act of 2020, with shareholders benefiting from extensions and funds schedules for 2020, 2021 and 2022.
With the pandemic now coming to an end, the US government has announced an expiration date of March 15, 2022 which means the grace period will end.
What does the FSA cover?
As mentioned earlier, an FSA account covers any expenses not covered by your regular health insurance provider.
However, an individual’s FSA can also cover a much wider range of medical products and services, such as prescription drugs, first aid kits, breast pumps, tampons, menstrual pads, thermometers, and blood pressure monitors.
Funds from your FSA account can also be used for COVID-19-related expenses such as masks, hand sanitizers, and pulse oximeters.
Additional funds from the FSA may also be used to cover deductibles and co-payments, excluding health insurance premiums.
Finally, FSA money can also be used to cover certain medical and dental expenses for your spouse or dependents.
How much can you allocate in your FSA account?
You are usually allowed to contribute $2,850 annually to your FSA account based on information provided by health.gov.
Married couples can qualify for double that amount provided their spouses also add 2,850 of their earnings and through their employer to their FSA account.
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