What is a flexible spending arrangement?
A flexible spending arrangement (FSA) is a form of cafeteria plan benefit, funded by salary reduction, that reimburses employees for expenses incurred for certain qualified benefits. An FSA may be offered for dependent care assistance, adoption assistance, and medical care reimbursements. The benefits are subject to an annual maximum and are subject to an annual “use-or-lose” rule. An FSA cannot provide a cumulative benefit to the employee beyond the plan year.
Related Questions
- Can a Health Reimbursement Arrangement (HRA) or Flexible Spending Account (FSA) also be offered along with a Health Savings Account?
- Can I roll over my Flexible Spending Account (FSA) or Health Reimbursement Arrangement (HRA) account balance to an HSA?
- Can I use the Dependent Care Flexible Spending Arrangement if I pay a family member for childcare?
