A flexible spending account (FSA), also known as a "cafeteria" plan, enables individuals to pay for medical or dependent care expenses. There are at least 33 million employees in the U.S. who use their FSA to pay for various medical expenses.
An FSA is sponsored by many employers and allows contributions of pretax funds to the account. In 2021, an individual may contribute a maximum of $2,750. In most years, unused funds over 20% of the contribution limit are not permitted to be carried forward to the following year. This is often called the "use–it–or–lose-it"...More