Flexible Spending Accounts (FSA)


FSAs let you take money from your paycheck, before it’s taxed, to pay for eligible healthcare and dependent daycare expenses. Funds put into the plan avoid Federal Income Tax, FICA and most state taxes, creating tax savings for both employee and employer.

What is a Flexible Spending Account?

A Flexible Spending Account (FSA) is a type of account, provided by your employer, that allows you to put aside money to pay for eligible healthcare and dependent daycare expenses. The money going into the account is tax-free (no payroll tax is withheld) which can save you money on items and services you are already purchasing.

By enrolling in an FSA, you may save up to 40% on your healthcare and dependent daycare costs.


What are the different types of FSAs?

A health FSA can be used for eligible medical expenses such as copays, coinsurance, deductibles, dental, vision, prescriptions, medical supplies, and procedures. Even over-the-counter medications and menstrual care products are eligible expenses.

A limited-purpose FSA is for eligible dental and vision expenses only. It allows those with a Health Savings Account (HSA) to use HSA funds for medical expenses and use limited-purpose FSA funds for other eligible expenses such as orthodontia or glasses.

A dependent care FSA can be used for expenses incurred to care for children age 12 and younger, as well as adult tax dependents, who are unable to care for themselves while you are at work.


Am I Eligible for a Flexible Spending Account?

In general, all you need to be eligible for an FSA is to be employed by an employer who offers an FSA. Unlike with a Health Savings Account (HSA), you are not required to have a High Deductible Health Plan (HDHP). You should not be enrolled in a health FSA if you are contributing to an HSA.


Do I Need to Save My FSA Purchase Receipts?

Yes! We are obligated to review FSA transactions to make sure they are eligible according to IRS guidelines. To confirm that you made an eligible purchase with your FSA funds or received FSA-eligible services, you may be asked for copies of itemized receipts, statements, or an Explanation of Benefits (EOB) summary from your doctor’s or dentist’s office, hospitals, and stores that do not automatically verify eligible expenses.

If you receive a request for documentation, take a picture of your paperwork with your mobile device and submit it through the BPC mobile app or upload it to the online participant portal. You can also fax or mail us a paper copy, but expect longer processing times for these methods.

FSA Eligible Expenses and Items

Why Should Employers Offer an FSA?

  • Helping employees with the rising costs of healthcare and childcare is a great way to attract and retain talent. Offering a flexible spending account (FSA) is an easy way to do that.

  • Employers will save up to 7.65% in payroll taxes on every dollar that the employee contributes.

  • Our expert team works with you to choose the right FSA plan to increase employee satisfaction and benefit everyone financially. We’ll ensure the plan is easy to use and understand.

Interested in learning more about our FSA services? Contact us today!