What is Health flexible spending account?
In short
A health flexible spending account lets employees set aside part of their salary before tax to pay medical expenses. The 2025 limit is $3,300.
Key takeaways
- Unused amounts are forfeited unless the plan allows a limited carryover ($660 for 2025) or a grace period of up to 2½ months.
- The full annual amount is available from the start of the year.
- Unlike a health savings account, it doesn't require a high-deductible health plan and generally isn't portable.
Where it's tested
TCP: Personal Financial Planning — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
An employee receives disability benefits under a policy for which the employer paid all premiums and excluded them from the employee's taxable wages. How are the benefits taxed?