Flexible Spending Accounts (FSA), are special accounts that allow employees to use pre-tax dollars to pay out of pocket medical expenses not covered by health insurance. The FSA reduces payroll taxes for both the employer and the employee much the same as pre-taxing premiums for a POP Plan. For the employee, it's like getting a 25%-30% discount on medical, dental and vision care expenses.
During open enrollment, each year an employer, allows employee’s to decide how much money they estimate to spend in unreimbursed healthcare, dental and vision care expenses for the coming year and contribute it to the FSA. Employees are encouraged to be conservative, because if they don’t use the dollars by the end of plan year they’ll lose whatever money they set aside in the plan that wasn’t used. This money can be accessed by debit card or simply by emailing or faxing the qualified receipts to the firm administrating the FSA.
