Flexible Spending Account (FSA)

A Flexible Spending Account is an employee benefit that allows an individual to set aside a portion of their wages (pre-tax) to pay for medical or dependent care costs. Unlike a Health Savings Account (HSA), a FSA is not administered by your health insurance.

Because FSA contributions are deducted from your pay before taxes are calculated, FSAs can help you save money by reducing your taxable income.

You can enroll in an FSA if you are currently eligible for enrollment in a Federal Employees Health Benefits (FEHB) program.

Types of FSAs:

Health Care FSA (HCFSA): covers any eligible medical costs and is open to anyone eligible for enrollment under the FEHB program, unless you have a High Deductible Health Plan (HDHP) with a Health Savings Account (HSA). Maximum contribution: $2,500

Limited Expense Health Care Account FSA (LEX HCFSA): covers any eligible dental and vision expenses and is open to anyone eligible for enrollment under the FEHB program, even if you have a HDHP with a HSA. Maximum contribution: $2,500

Dependent Care FSA (DCFSA): covers any child or adult dependent care expenses and is open to any NIH employee who is not temporary, seasonal, or intermittent. Maximum contribution: $5,000 per household or $2,500 if married but filing separately.

FSA Eligible Expenses

Many common health care expenses are eligible for reimbursement from the Health Care FSA, including medical and dental copayments, deductibles, prescriptions, over-the-counter medications, orthodontia, and vision care. As a general rule, any health care expense you could deduct from your federal income tax is eligible for reimbursement from your Health Care FSA.

A Dependent Care FSA reimburses employees for care provided by eligible caregivers to dependents so that they can work or attend school. Care can be for dependent children (up to age 13), or a dependent of any age if he or she lives with the employee and cannot care for themselves.

The following are some expenses not covered under the Dependent Care Flexible Spending Account:

  • kindergarten

  • 24-hour nursing home expenses

  • daycare with a primary purpose of education or enrichment

  • expenses you expect to claim as a dependent day care tax credit

  • services provided by one of your children under age 19

  • expenses for overnight camps

  • expenses that allow you or your spouse to perform volunteer work

  • transportation, entertainment, food, and clothing expenses

  • expenses incurred during a medical leave longer than one pay period

Learn about HSA vs HRA insurance.