Flexible Spending Account

How It Works

When you set up an FSA, your employer takes money out of your paycheck before taxes. Then you draw on the funds during the plan year to pay for qualified expenses.

Make sure to set aside only as much as you'll use - with an FSA, you typically can only use the money for expenses during the current plan year. Some employers may offer a grace period, which allows extended access to FSA funds.

Your employer determines what types of expenses are qualified, within guidelines defined by the Internal Revenue Service (IRS). Most employers' plans cover:

• Medical expenses like deductibles and copayments
• Out-of-pocket prescription costs
• Dental expenses
• Vision services

However, your company may not include all of the categories above. You can't use the money for experimental treatments, cosmetic procedures, or insurance premiums.

You have access to the full annual amount of your healthcare FSA - even money that hasn't been deducted from your paycheck yet - on the first day of the plan year.

Some employers also offer a separate FSA for qualified dependent care expenses, such as childcare or adult day care for a dependent who is under the age of 13 or disabled. You can set up a healthcare account, a dependent care account, or both types, depending on your situation.

Beginning Jan. 1, 2011, over-the-counter medications such as pain relievers, cough syrup, and allergy medicines will require a prescription to be eligible for reimbursement from an FSA or PCA. The HumanaAccess Card will not be able to be used to purchase OTC medications.

Financial Tools

Here are some Humana tools that may be useful to members who have a Flexible Spending Account.