A Flexible Spending Account lets you set aside money from your paycheck before taxes to help pay for eligible health care or dependent care expenses. Because the money goes into your account before taxes are deducted, an FSA can help lower your taxable income and make the expenses you’re already planning for more manageable.
You choose how much to contribute each year, so take some time to consider your expected expenses. FSA elections don’t automatically continue from one year to the next—you must actively enroll and choose a new contribution amount each year.
Two accounts, two purposes
Tax-smart health care
From copays and prescriptions to lab work and other eligible expenses, health care costs can add up. A Health Care FSA lets you contribute up to $3,400 per year before taxes to help pay eligible expenses for you, your spouse, and your children.
When you have an eligible expense, you can pay with your HealthEquity debit card or submit the required documentation for reimbursement.
Daycare support
Caring for a child or an adult family member can have a huge impact on your budget. A Dependent Care FSA lets you contribute up to $7,500 per year before taxes to help pay eligible care expenses while you and your spouse, if applicable, work or look for work.
Eligible expenses may include care for children age 12 and younger or for eligible adult dependents who are unable to care for themselves. Depending on IRS requirements, care may be provided by a babysitter, live-in caregiver, or eligible daycare center.
Note
If you are enrolled in the Blue Shield HSA, you are not eligible to participate in the Health Care FSA.
Before you enroll
FSAs offer significant tax advantages, but are subject to IRS regulations:
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