A Flexible Spending Account (FSA) is a pre-tax benefit offered by employers that allows employees to set aside money for eligible healthcare or dependent care expenses. When employment ends, the funds in this account are subject to specific rules regarding their availability and usage. Unused funds generally do not remain accessible to the former employee after a certain period.
Understanding the implications of job separation on these accounts is important for individuals managing healthcare costs. Proper planning can help maximize the benefit before departure and avoid forfeiting unused contributions. The existence of FSAs provides a way to reduce taxable income while addressing predictable medical or dependent care needs during the period of employment.
