How do I benefit from participating in an FSA?


There at least two significant ways to benefit from an FSA. The first is by taking advantage of the tax savings. By reducing your gross income, you pay less in taxes, take home more pay and have the freedom to choose how your money is used or invested. The second benefit is the “cash flow” increase built into the medical FSA (not the dependent care FSA). This means that no matter how much money you have actually contributed to the plan at any given point, you can still be reimbursed up to your entire annual election. So a major medical expense at the beginning of the claim period can be reimbursed even though few, if any, deposits have been made into the account at that time. This applies to the medical FSA only.