Should I Get a Flex Spending Account and What to Expect

A Flex Spending Account (FSA) can be a great way to save money on healthcare and childcare expenses, but it's essential to understand what to expect before signing up.

FSAs are employer-sponsored accounts that allow you to set aside pre-tax dollars for qualified expenses, reducing your taxable income and lowering your tax bill.

You can use FSA funds for a wide range of expenses, including medical bills, prescriptions, copays, and even some over-the-counter medications.

According to the IRS, FSAs are only available to employees of participating employers, so be sure to check with your HR department to see if your company offers this benefit.

The IRS sets annual limits on FSA contributions, which vary based on your employment status and the type of FSA you have.

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A Flexible Spending Account (FSA) is a great way to set aside pre-tax money for out-of-pocket health care expenses. You can contribute up to $3,050 to a Health Care FSA or a Limited Expense Health Care Account FSA, depending on the type of FSA you have.

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FSAs allow you to reduce your annual taxable income by setting aside a portion of your pay. This means you won't pay FICA (7.65%) or federal income tax (up to 37%) on your elected dollars.

Here are the different types of FSAs and what they cover:

By contributing to an FSA, you can save money and reduce your taxable income. FSAs can be paired together with a Health Reimbursement Arrangement (HRA) or a Health Savings Account (HSA).

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There are several types of Flexible Spending Accounts (FSAs) to choose from, each with its own benefits and limitations.

A Health FSA covers a wide range of health care expenses, including copays, deductibles, prescription medications, and dental and vision services. You can use it to pay for expenses for yourself, your spouse, or your qualified tax dependents, even if they're not enrolled in your medical or dental plan.

Some employers may offer Limited Purpose FSAs that cover only dental and vision expenses, such as glasses, contact lenses and solution, and dental copays. You can also use a Limited Purpose FSA if you have a consumer-directed health plan (CDHP) with a health savings account (HSA).

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If you're considering enrolling in an FSA, it's essential to understand the rules and limitations. For example, you can't have both an FSA and a Limited Purpose FSA at the same time, and you can't have an FSA and be enrolled in a CDHP with an HSA.

Here are some key facts to keep in mind:

Dependent Care is a type of Flexible Spending Account (FSA) that helps you pay for expenses related to caring for your dependents. This can include things like daycare, after-school care, and adult day care.

You can use a Dependent Care FSA to cover expenses for dependents under the age of 13, as well as disabled dependents of any age. For example, you can use it to pay for work-related babysitting or after-school care.

The contribution limit for a Dependent Care FSA varies, but for 2025, it's $5,000 per household or $2,500 for married couples filing separately. This means you can contribute up to this amount to your Dependent Care FSA each year.

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Here are some examples of eligible expenses for a Dependent Care FSA:

It's worth noting that you can only use the amount of money you've contributed to your Dependent Care FSA up to that point. This means you won't have access to all your funds right away.

MetLife Health Savings Accounts are designed to give employees more control over their benefits. Our recent Employee Benefit Trends Study found that employees are interested in their employer offering a wider array of benefits.

In this increasingly competitive job market, employees are looking for more flexibility and choice in their benefits. MetLife Health Savings Accounts can help employers meet this demand.

Employees are interested in having more options for managing their healthcare expenses. By offering Health Savings Accounts, employers can provide a valuable benefit that sets them apart from competitors.

MetLife Health Savings Accounts can be used in conjunction with a high-deductible health plan to help employees save for medical expenses. This can be a great option for employees who want more control over their healthcare spending.

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To be eligible for a Flex Spending Account (FSA), you need to work at a company that offers FSAs as part of their employee benefits. Generally, employees don't need to be enrolled in a health insurance plan to open an FSA.

If you have a health savings account (HSA), you likely won't be eligible for a general healthcare FSA, because they're used to pay for the same types of medical expenses. However, there are specialty FSAs that you can use in conjunction with an HSA.

You can usually enroll in an FSA when you start a new job and make your other benefits selections, or after that during your employer's annual enrollment period. If you have a qualifying life event, such as a new baby or adoption, you may also be able to enroll then.

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To be eligible for a Health FSA, you need to work at a company that offers FSAs as part of their employee benefits. Employees who are eligible for benefits may enroll in the Health FSA when their employer is offering it as an option.

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You don't need to be enrolled in a health insurance plan to open a Health FSA, but you do need to work for a company that offers FSAs. If your company offers FSAs, you can enroll in the Health FSA, even if you're covered on a spouse's or parent's medical plan.

Here are the types of family members who can incur qualified expenses that can be reimbursed from your Health FSA:

If you have a Health FSA, you may disqualify your spouse or adult child from opening and funding a Health Savings Account, even if they never reimburse a qualified expense from your FSA.

To enroll in an FSA, check with your HR team to see when your company's annual enrollment period is, or if you have a qualifying life event, you may be able to enroll then.

You can usually enroll when you start a new job and make your other benefits selections, or after that during your employer's annual enrollment period.

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If you're eligible for FEHB, you can enroll in an FSA during your first 60 days of employment or a qualifying life event prior to October 1 of the calendar year.

You must reenroll in an FSA each year, as elections do not automatically renew.

Here's a quick rundown of when you can enroll in an FSA:

You don't need to be enrolled in a medical plan to have an FSA, but you do need to be eligible for benefits and have your employer offer it as an option.

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Having an FSA can be a great way to save on taxes, but it's essential to consider the benefits and limitations. Contributions aren't subject to tax, which can be a significant advantage.

Here are some key benefits of an FSA:

However, there are some limitations to consider. Funds typically need to be used by the end of the year, and unused funds may be forfeited. Additionally, FSAs aren't portable, so if you leave your job or are terminated, you typically won't be able to take the money in your FSA with you.

Having an FSA comes with multiple advantages, such as saving on taxes. But FSAs can also have disadvantages, like "use-it-or-lose-it" restrictions and lower contribution limits.

You can save up to $3,300 in a Limited Purpose FSA for 2025, which can be used to help cover qualified dental, vision, and preventive care expenses.

FSAs are tied to your employee benefits, so if you leave your job or are terminated, you typically won't be able to take the money in your FSA with you. This can be a significant limitation, especially if you need access to your funds.

One of the benefits of an FSA is that contributions aren't subject to tax. The funds you contribute to an FSA are deducted from your paycheck and aren't subject to employment or federal income tax.

Here are some common limitations of FSAs:

With an FSA, you can use your funds to pay for day-to-day items, such as sunscreen, band-aids, and menstrual care products. This can be a big help in saving money on everyday expenses.

An HSA, or Health Savings Account, is a great way to save for medical expenses while reducing your tax liability. You can own an HSA, and it's not tied to your employer, making it a portable option that follows you wherever you go.

To be eligible for an HSA, you'll need to have a high-deductible health plan, or HDHP. This is a requirement set by the IRS.

One of the best things about HSAs is that you can roll over any unused funds to the following plan year, so you don't have to worry about losing your savings. This is a big advantage over FSAs, which have use-it-or-lose-it mandates.

HSAs also offer the flexibility to invest your funds or earn interest, giving you a chance to grow your savings over time. This is not an option with FSAs.

Here are some key benefits of HSAs at a glance:

Overall, HSAs are a valuable tool for managing medical expenses and building savings over time.

Contributing to an FSA is a straightforward process. The IRS sets yearly limits for FSA contributions, which may change year to year.

You can contribute a minimum of $120 to an FSA. This is a fixed amount that applies to both FSA types.

The maximum contribution limit varies depending on the type of FSA. For one type, the maximum is $3,200, while for another, it's $3,050.

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If you decide to open an FSA, you can normally do so during your company's open enrollment period. You can also make changes to your FSA, as well as your other employer-sponsored benefits, at this time.

To make the most of your FSA, think about your finances and priorities to decide if you'll reasonably be able to contribute enough to make it worthwhile. If you often pay out of pocket for medical expenses, an FSA might be able to save you money in the short and long term.

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To carryover unspent funds, you must enroll in either the Limited Purpose FSA or FSA for the following year, or have at least $120 left in your FSA balance. If you enroll in an FSA, the carryover amount will be added to your FSA election for the next plan year.

Here are some examples of how carryover works:

Note that the maximum carryover amount is $640, but this may vary.

Unused funds in your FSA will expire if you don't use them by the end of the plan year, December 31. This is known as a "use it or lose it" policy, so it's essential to plan ahead and estimate your expenses carefully.

If you don't use your FSA funds, you'll lose them, unless your employer has a plan that allows you to roll over a portion of your funds into the next year or gives you a grace period to use those funds. Check with your employer to see how their FSAs work.

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You can start submitting claims for eligible expenses on or after January 1, the first day of your plan year. The full amount you set aside for your FSA contribution is available on this date.

To avoid losing unused funds, you must incur all expenses by December 31 and submit all claims to Navia Benefit Solutions for reimbursement by March 31 of the following year.

Unused funds up to $660 will carry over to the next plan year, but any funds above this amount will be forfeited to the HCA. This means that if you have $670 left in your FSA on December 31, for example, only $660 will carry over to the next year.

Here's a quick rundown of the carryover rules:

You'll need your receipts to substantiate your expenses, especially if you're using a reimbursement plan. Some FSAs require you to pay out of pocket and then submit a claim for reimbursement.

Even if you use a debit card, you may still be asked to provide receipts to verify your expenses. You can't just assume you'll have access to all your funds at once.

You can only use the amount of money you've contributed up to that point in a Dependent Care FSA. This means you'll need to keep track of your receipts and expenses carefully.

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