What is an FSA? Health Insurance Explained

With so many different terms floating around in the health insurance industry, it can be confusing to understand what an FSA is and why you might want one. We’ve made it easy for you to learn about FSAs and how they might impact how much you pay for therapy.

What is an FSA?

An FSA is a Flexible Spending Account (also sometimes called a Flexible Spending Arrangement). An FSA is a savings account provided by your employer and is filled by a predetermined amount from your paycheck each pay period – so, for example, you could ask to put $150 each paycheck into your FSA. Your employer then takes out this amount before they apply taxes, which means that you are not taxed on what you put into your FSA. This potentially saves you the money you would have paid in taxes!

You can use the money in your FSA to pay for general out-of-pocket health costs such as copays, deductibles, prescriptions, or medical devices. This is helpful when it comes to therapy because you’ll be able to use your FSA money to pay for per-session costs such as copays - making therapy more affordable and accessible.

FSAs have a limit of $2750 in 2020, meaning that you cannot contribute more than this amount. However, if you have a partner or children, this amount increases.

How do I know if I’m eligible for an FSA?

In order to start an FSA, you will need to enroll in one through your employer either when you begin your position or during the open enrollment period (which is generally in the late fall). Ask your Human Resources department contact whether or not your employer has this benefit, and if they do, what the steps are to enroll.

What are the benefits of having an FSA?

Having an FSA is very helpful for some people who routinely have out-of-pocket costs. Here are a few reasons having an FSA is beneficial:

What are the downsides of having an FSA?

There are limitations of having an FSA as well, which means that they aren’t for everyone. Here are a few downsides of FSAs:

What should I keep in mind when setting up my FSA?

Enrolling in an FSA is a big decision, so here are a few things to keep in mind when considering whether or not FSAs are for you:

Overall, FSAs can be helpful and save you money while also empowering you to spend your money on healthcare costs (like therapy!). As you search for high-quality therapists in your area, consider using your FSA money as a way to make it easier to begin working towards your emotional goals.