Flexible Spending Account

A flexible spending account, or FSA, is a great introductory option. Your employees can learn how this plan works without any complicated rules. You can pair it with any Blue Cross Blue Shield of Michigan health plan.

Contributions and withdrawals are tax free.
Employers get payroll tax savings from employee contributions.
Employees often report increased job satisfaction because they have funds to help pay for medical expenses.

How an FSA works

An FSA can be paired with any Blue Cross health plan. This type of account can be funded by both you and your employee based on IRS guidelines. It is a use it or lose it type of account. If your employee doesn't use the funds in this account, you can keep them. Employers may choose to allow employees to carry up to $500 into the next year. The full annual contribution amount is immediately available for use at the beginning of the plan year.

Employees put money into their FSA through payroll deduction only. This helps them save money by reducing their taxable income. 

You can learn more about how an FSA stacks up to other account types with our Consumer-Directed Health Comparision Guide (PDF).

Types of FSA

You can pair an FSA with any of our group health plans. There are several types you can choose to offer: 

  • Health care FSA: This pays for qualified medical expenses, including copays and deductibles.
  • Dependent care FSA: This reimburses qualified childcare and eldercare expenses.
  • Limited purpose FSA: This reimburses qualified dental and/or vision care services and must be paired with a health savings account, or HSA.
  • Post-deductible FSA: This reimburses qualified medical expenses after the plan deductible is met. It also must be paired with an HSA.
  • Spending account only FSA: This reimburses qualified medical expenses for those who don't have any Blue Cross coverage.
  • Ancillary-only FSA: This reimburses qualified medical expenses for those who have Blue Cross dental or vision coverage but don't have Blue Cross medical coverage.
We can help you choose the right option for you and your employees. 

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