Flexible Spending Account

A Flexible Spending Account (FSA) is an employer owned account that lets you set aside pre-tax dollars (which lowers your taxable income) to pay for eligible out-of-pocket expenses.
There are two types of FSAs:
1. HEALTHCARE FSA
A health FSA is an employer-sponsored account that employees can use to pay for (or reimburse themselves for) qualifying medical expenses on a tax-free basis for medical, dental, orthodontia and vision expenses. Healthcare FSAs can be offered with any other type of health plan.

2. DEPENDENT CARE
A dependent care flexible spending account (FSA), or dependent care assistance program, allows you to pay for certain expenses on a tax-free basis. If you care for a dependent, this may be for you!

How it works
Each pay period, money moves from your paycheck into your dependent care FSA. When you need to pay for dependent care expenses, like elder care or preschool, you can use the money from your account. And as long as you’re paying for an eligible expense, the money is tax-free! Speak with the People Team to learn more about how our dependent care assistance programs can benefit your family.

If there are unused funds in the FSA at the end of the year (or after the grace period), the employee forfeits those funds. However, employers also have the option of allowing employees to carry over up to $500 of unused funds from one year to the next. This dollar amount is adjusted for inflation. For plan years beginning in 2026, the limit on FSA carryovers is $680. Note that any amount that is carried over does not count toward the maximum contribution limit.