:max_bytes(150000):strip_icc()/GettyImages-1290302520-bcb7401893874eae9607bd3d0335aaa0.jpg "4 Steps Clients Should Take to Maximize Their FSA Accounts")
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When talking to clients about employee benefits, popular accounts likely spring to mind: 401(k)s with employer matches, group disability insurance, etc. However, one employee benefit that gets less attention yet offers significant value is Flex Spending Accounts (FSA).
FSAs allow account holders to set aside funds pre-tax for eligible health expenses and over-the-counter health products. In 2025, employees can contribute up to $3,300; when utilized correctly, they can lower the out-of-pocket cost of maintaining their health.
Understanding how your client can maximize FSAs is important in ensuring that a valuable benefit is not wasted.
Key Takeaways
- In 2025, eligible account holders can contribute up to $3,300 in pretax dollars.
- Eligible expenses range from out-of-pocket health care costs to over-the-counter medications.
- Understanding the plan rules for an FSA and how eligible expenses are reimbursed can clarify how an FSA can benefit your finances.
What I’m Telling My Clients
1. Map Out Your Recurring Health Expenses
Chart the consistent health expenses you or your family may incur annually. Copays for physician visits, dental cleanings, and specialist visits for a particular health diagnosis can be reimbursed with FSA dollars. By estimating the cost of these expenses, you can start to calculate the amount that may be contributed to an FSA.
2. Research Over-the-Counter FSA Purchases
Many may be surprised that basic over-the-counter medications and items like nasal sprays and menstrual care products can be paid for with an FSA. Large retailers such as Amazon, Walmart, and Target have pages on their website that only list FSA-eligible items for purchase. Knowing what purchases are eligible for reimbursement may expand your thought process on how many ways the FSA can be used.
3. Understand Your Plan’s Rules
Each employer will have different structures for their FSA, starting with how eligible funds are reimbursed. Some plans require expenses to be submitted, and others may issue FSA cards that can be loaded like debit cards.
Important
While the calendar year is often the deadline for using FSA funds before they revert to the plan, many employers offer a grace period through March 15th.
4. Thoughtfully Set Your Contribution Rate
It’s important to carefully think through your contribution amount, as FSA contributions can typically not be changed throughout the year. Once the appropriate amount is found, the FSA can be integrated into and complement the rest of your financial plan.
The Bottom Line
Grasping the ins and outs of a new financial instrument may be daunting, but an FSA is a tool that’s worth taking the time to understand. Learning how to maximize its value and establishing a rhythm for paying for eligible expenses can help seamlessly integrate an FSA into your daily life, all while lowering your tax burden and improving your monthly cash flow.
