The following are the types of flexible spending account (FSA) which your employer may entitle you to:
1. The Health Care FSA (also known as Medical FSA, Medical Expense FSA, or simply Health FSA), is a type of account where qualified medical expenses are made tax free. These qualified expenses can include insurance deductibles, co-payments, and coinsurance costs as well as the costs of specific products, treatments, and medications that are over the counter and not covered by insurance. Medical issues can be serious, or as simple a headache that requires Tylenol.
2. The Dependent Care FSA involves qualified day care expenses being put aside tax free by your employer. While almost always used for children, the dependent care flexible spending account can also be used for “adult day care” for elderly dependents (such as parents) that you care for.
3. The Travel FSA involves having the costs of public transportation and in some cases tolls and parking put aside tax free and later reimbursed.
It makes sense to see if your employer offers any or all of these flexible spending accounts, and then which one(s) makes sense for you.