FSA, or flexible spending accounts, are employer-sponsored accounts that allow employees to set aside pre-tax dollars to pay for qualified medical expenses. These accounts can be used to pay for a variety of expenses, including doctor’s visits, prescription drugs, and dental care.
In 2025, the maximum amount that employees can contribute to an FSA will increase from $2,750 to $3,050. This increase is due to the rising cost of healthcare. The FSA rollover provision allows employees to carry over any unused funds from one year to the next. This provision is important because it allows employees to save money on their healthcare costs.
