What Is a Medical Expense FSA?

A medical expense FSA is a type of account that you can get through certain employers benefits packages. Here are the basics of the medical expense FSA and how it works.

Medical Expense FSA

This is a type of account that will allow you to contribute money on a pretax basis from your paycheck. The money will go into the account and you can then use it to pay for certain medical excesses. Used in conjunction with your health insurance plan, you will be able to pay for your deductible, your co-pays, prescription drugs and over-the-counter drugs. You can also use this on other types of medical treatments as well.

Losing the Funds

One of the downsides of this type of account is that you will lose the funds if you do not use them. At the end of every year, you are going to lose any money that is left in the account. This means that you have to consider how much money you want to contribute and how you use the money throughout the year.


This type of account is actually prefunded on the first day of the year by your employer. You are going to be reimbursing them over the course of the year by deducting money out of your paycheck.