Flexible spending account (FSA)
Updated September 30, 2026
Definition
An account through your employer that lets you pay many medical costs with money that isn't taxed. You usually need to use it by the end of the plan year.
A flexible spending account (FSA) is a benefit your employer sets up. You choose how much to put in, up to a limit your employer sets. The money comes out of your pay before taxes, and you can use it for copays, deductibles, prescriptions, and many other medical costs.
The care generally has to happen during the plan year you're using the money for. Money you don't use is usually lost at the end of the year. Your employer may give you 2.5 extra months to spend it, or let you carry a small amount into the next year, but not both.
For example, say you put $1,200 in your FSA for 2026. In March, you get a $300 bill for a visit that month. You can pay it from your FSA and still have $900 left. When you pick benefits for next year, our guide on how to choose a health insurance plan can help you plan.
Related terms
Guides that use this term
- GuideHow to choose a health insurance plan and avoid big billsCompare health plans by total yearly cost, not just the premium. Check networks, doctors, drugs and the SBC, with a worked example and 2027 deadlines.
- Start hereCan't afford your medical bills? Every option, in orderCan't afford a medical bill? Here's every option in order, from checking the bill and charity care to payment plans, collections rights and your credit.
Sources
- Flexible spending account (FSA) (glossary), HealthCare.gov. Accessed September 30, 2026.
- Publication 969, Health Savings Accounts and other tax-favored health plans, Internal Revenue Service. Accessed September 30, 2026.
This is general information, not legal or medical advice. Rules can depend on your plan and your state. Romi Care isn't an insurer, law firm, collection agency, or government program.