What Is a Flexible Saving Account?

A flexible saving account is a type of account that allows individuals to save money for qualified health expenses.  Here are the basics of the flexible saving account.

Flexible Saving Account

The flexible saving account is also referred to as a flexible spending account. This is a type of account offered by many employers in conjunction with other benefits. The employer will pre-fund this account, and the employee will reimburse the employer over the course of the year. The employee can make tax-free contributions to this account.

Uses

The employee can use the money in this account for a number of different things. For example, she can use this money to pay for doctor co-payments or her deductible. You can also use the money to pay for prescription drugs or over-the-counter drugs. You can even use funds from this type of account to pay for childcare expenses.

Losing the Funds

One of the big drawbacks with this type of account is that you will lose your funds at the end of the year if you do not use them. Every year, the money in your account will reset, and you will have to start funding it all over again.

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