Health FSA Details
Save Money on Qualified Medical Expenses.
A Health Care FSA (HCFSA) allows you to set aside money for the uncovered or un-reimbursed portions of qualified medical costs; it is not a replacement for your health insurance... Examples of the types of expenses that qualify are:
Copayments
Deductibles
Coinsurance
Eyeglasses and contact lenses
Lasik Eye Surgery
Orthodontia
Over-the-counter medications that are medically necessary
Health Care FSAs are advantageous because only medical expenses that exceed 7.5% of your Adjusted Gross Income (AGI) can be deducted on your Federal Income Tax form. However, Health Care FSAs are tax-free from the first dollar. You do not have to meet the 7.5% AGI minimum before receiving the deduction. Further, money set aside through an FSA is also exempt from FICA (social security) taxes. This exemption is not available on your Federal Income Tax return. However, you may wish to consult with a tax professional to determine which option is best for you.