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Is a Flexible Spending Account separate from health insurance?
How is a Flexible Spending Account Different?
Yes. A Flexible Spending Account (FSA) is an employer-sponsored benefit add-on that lets you contribute tax-free income to cover qualified health care expenses such as those not paid for by your insurance plan. Your health insurance plan is completely separate from your FSA, and you do not necessarily have to be enrolled in a health insurance plan to have an FSA (although due to Health Care Reform, you may want to).
Let's break down some rules about FSAs and health insurance:
- You cannot cover costs paid by your insurance plan with an FSA as well.
- You cannot use more than one FSA for the same medical bill.
- Expenses paid for with an FSA cannot be claimed on an annual income tax return.
- You cannot use an FSA for insurance premiums. Contact your FSA administrator about FSA eligible expenses for your plan.
You can use an FSA to pay for out-of-pocket expenses not paid for by your health insurance including: