FSA (flexible spending account)

An FSA is an employer-offered account that lets you set aside pre-tax dollars (up to $3,300 in 2026) for qualified medical expenses. Unlike an HSA, you do not need a high-deductible plan to participate. The trade-off is that FSAs are typically use-it-or-lose-it: unused funds usually do not roll over, though some plans allow a small carryover or grace period.

FSAs cover most out-of-pocket medical costs including copays, deductibles, prescription medications, vision care, and many over-the-counter items. They are useful for predictable annual healthcare costs.