PriorityFSA: Flexible Spending Accounts

A PriorityFSA^SM Flexible Spending Account could give you tax savings of up to 40 percent of every dollar you spend on health care deductibles, copayments, over-the-counter medicines, dental care, braces, glasses or contacts, child care and much more.

How flexible spending accounts work
An FSA account allows you to set aside tax-free dollars to pay for dependent care and certain health expenses that are not paid for by your health insurance plan.

• You can choose to enroll in a Health Care Account, a Dependent Care Reimbursement Account, or both.
• At the beginning of the year, you decide how much money to set aside, total.
• The flexible spending account money is deducted from your paychecks by your employer.
• Every pay period, the FSA money you set aside gets transferred to your accounts before state and federal income taxes are deducted. This reduces the taxes you pay.
  
• The entire annual amount you set aside in a flexible spending account is available right away to cover many of your health care expenses. If you set aside $600 ($50 a month) in an FSA and you have $600 in health care or medical expenses in February, you can be reimbursed the whole $600 from your PriorityFSA account immediately. It doesn't matter that you've only contributed $100 of the $600 annual total to your account so far.
• If you have a Health Savings Account (HSA), there are limits to the kind of FSA you can have. Read about limited FSAs.
  

Use it or lose it
You'll need to plan carefully to set aside only as much as you'll need in your PriorityFSA account. Under IRS rules, you lose any money you don't use by the end of your FSA plan year.

Our PriorityFSA brochure (3.5MB PDF) includes worksheets to help you estimate how much to set aside in your flexible spending account each year.



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