What is a Health Flexible Spending Account (FSA)?
A Health Flexible Spending Account is an account allowed under Section 125 of the Internal Revenue Code (cafeteria plans) that allows employees to direct before tax dollars into an account to pay for qualified medical expenses not covered under the health plan. Contributions to a Health Flexible Spending Account by an individual or their spouse makes that individual ineligible to contribute to an HSA.
Eligible expenses are outlined in Section 213(d) of the Internal Revenue Code.
What is a Limited Purpose Health Flex Spending Account (FSA)?
A Limited Purpose FSA restricts reimbursements to certain permitted benefits such as vision, dental, or preventive care benefits, allowing a person to be eligible to make contributions to an HSA.
