How Much Should You Contribute to Your Healthcare FSA?
Learn how to plan your healthcare FSA contributions and use Associated Bank’s calculator to estimate medical, dental and vision expenses.
What is a healthcare FSA?
An FSA is an employer-sponsored account used to pay for eligible out-of-pocket healthcare expenses with tax-free dollars.
Eligible expenses may include:
- Doctor visits, surgeries and hospital stays.
- Prescription and over-the-counter medications.
- Physical therapy and chiropractic care.
- Dental treatments like crowns, implants and braces.
- Vision expenses like glasses, contacts and LASIK.
Note: If you have a health savings account (HSA), you can only enroll in a limited-purpose FSA (for dental and vision expenses only). You can’t contribute to both a standard FSA and an HSA in the same plan year.
How to estimate your FSA contribution
Follow these simple steps to figure out how much to set aside:
- Estimate your healthcare expenses
- Review past spending.
- Include expected routine care and prescriptions.
- Consider upcoming procedures or emergencies.
- Understand FSA rules
- Most FSAs follow a "use-it-or-lose-it" policy.
- Some plans allow a grace period or let you roll over a portion of your unused balance into the next year. Consult your plan documents for details.
- The maximum amount you can contribute depends on your plan. Please consult your plan documents for details.
- Contributions are tax-free (federal income, Social Security and Medicare taxes).
- Use the Associated Bank FSA Contribution Calculator
- Enter your projected medical, dental and vision expenses.
- Get your estimated total health care expenses for the year. You should elect to contribute the lesser of your estimated health costs or your plan's contribution maximum to your FSA.
- See a breakdown of how much will be deducted from each paycheck.
- This tool makes it easy to estimate how much you expect to spend on healthcare costs next year so you can make an informed decision about how much to contribute to your FSA.
Key terms to know
- Copayment: A fixed amount you pay for a healthcare service. It may apply before or after a deductible is met. Your plan may have different co-pay amounts depending on the type of healthcare service you receive.
- Deductible: The amount you pay for healthcare services before your health insurance begins to pay a claim.
- Coinsurance: Your share of the costs of a healthcare service. Coinsurance is typically a percentage of the amount charged for services. You start paying coinsurance after you’ve paid your health plan deductible.
Plan ahead, save more
With the right planning, an FSA can help you save on healthcare costs and reduce your tax burden. Estimate your expenses, know the rules and use our calculator to make the most of your FSA.
Please note that your estimated annual healthcare expenses may exceed the annual maximum contribution limit allowed by your plan for a flexible spending account. Please see the your plan documents for your plan's contribution limit.
