Employee Benefits Guide: Flexible Spending and Health Savings Accounts

AESOP Auto Parts - Privileged & Confiden�al Healthcare Flexible Spending Account (FSA): A Healthcare FSA is an account that lets you set aside money from your paycheck before taxes to pay for eligible healthcare expenses like doctor visits, prescriptions, dental, and vision costs. You choose how much to contribute at the start of the year (up to the IRS limit), and your full election is available right away. Keep in mind, FSAs are a “use-it-or- lose-it” benefit—any unused funds may be lost at the end of the plan year unless your employer allows a limited rollover or grace period. Dependent Care Flexible Spending Account (FSA): A Dependent Care FSA allows you to set aside money from your paycheck before taxes to pay for eligible dependent care expenses, such as daycare, preschool, before- and after- school programs, summer day camps, and elder care for dependents who need supervision. You can contribute up to $5,000 per household per year ($2,500 if married filing separately). Like the Healthcare FSA, this is a “use-it-or-lose-it” benefit—unused funds do not carry over to the next year. Health Savings Account (HSA): An HSA is a tax-advantaged savings account you can use for qualified medical, dental, and vision expenses. You can contribute money pre-tax (or get a tax deduction), let your balance grow over time (often with interest or investment options), and withdraw funds tax- free for eligible healthcare costs. Unlike FSAs, any unused balance rolls over year to year, and the account remains yours even if you change jobs or retire—as long as you maintain eligibility.