Money & Protection
Flexible Spending Accounts
Overview
A Flexible Spending Account (FSA) is a tax-advantaged account that helps you save money on health care or dependent care expenses. AEO offers different types of FSAs:
You have these options:
Who Can Use the FSAs
Take a look at who is eligible to use the FSAs:
- Health Care FSA – Available as long as you don’t elect an HSA medical plan or your spouse doesn’t have an HSA
- Limited Purpose FSA – Available if you’re enrolled in an HSA/high deductible medical plan
- Dependent Care FSA – Available if you have dependent care expenses so you can work, look for work or attend school full time
How It Works
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1
You must enroll every year
To participate in an FSA, you must enroll each year.
If you want to participate in both a Health Care FSA and a Dependent Care FSA, you must enroll in them separately.
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2
You fund your account
Your contributions come out of your paycheck before taxes. See Contributions section below.
You are the only person who can contribute to your FSA; AEO cannot contribute.
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3
You pay for health care expenses
Make sure you keep your receipts in case you need to verify your purchase. Submit your expenses by the deadlines below.
Contributions
Health Care or Limited Purpose FSA
You can contribute between $260 and $3,300 a year.*
*Note: Limits may be lower for highly compensated employees.
Dependent Care FSA
You can contribute between $500 and $5,000 a year ($2,500 if you are married but file separate tax returns).*
FSAs at a Glance
| Health Care FSA | Limited Purpose FSA | Dependent Care FSA | ||
|---|---|---|---|---|
| Whose expenses are eligible | You, your spouse and your tax dependents |
| ||
| Eligible expenses | Eligible medical, prescription drug, dental and vision expenses | Eligible dental and vision expenses | Eligible dependent care expenses, such as licensed nursery schools, licensed day care centers for children and disabled dependents, after-school care and services from a care provider (must be age 19 or older and not claimed as a dependent) | |
| Contribution maximum | $3,300 a year | $5,000 a year (or $2,500 if you are married but file separate tax returns) | ||
Important Deadlines
Health Care and Limited Purpose FSA: The deadline to use your FSA dollars is December 31, 2025. You have until March 31, 2026, to request reimbursement and file claims. You can carry over up to $660 into the next calendar year; any amounts above that will be forfeited.
Dependent Care FSA: You have until March 15, 2026, to incur 2025 expenses. 2025 claims must be submitted by March 31, 2026. Any remaining amount will be forfeited.
Ways To Pay
Payment methods vary by FSA type.
Health Care and Limited Purpose FSA
Use the debit card mailed to you or pay up front and file a claim for reimbursement. You have access to the full amount you contribute for the year up front.
dependent Care FSA
Pay the expense up front and then file a claim for reimbursement. You must have the money in your account before you can receive reimbursement.
HSA + Limited Purpose FSA
Already have an HSA and wondering if you should consider the Limited Purpose FSA? This type of FSA might be right for you if:
- You’re already contributing up to the IRS limit in the HSA and want additional tax savings.
- You anticipate a large dental or vision expense during the plan year, such as orthodontia or LASIK.
FAQs
Does AEO contribute to my FSA?
No. Due to IRS regulations, only you can contribute to an FSA.
What happens to the money in my FSA account if I leave AEO?
You forfeit any money remaining in your account if you leave AEO.
Does my FSA election roll over?
No. You must re-elect the FSA every year.
Can I enroll in an FSA if I also have an HSA through my medical plan?
If you have an HSA, you can enroll in the Limited Purpose FSA for tax savings on dental and vision expenses. You can also enroll in the Dependent Care FSA if you incur eligible dependent care expenses.
Learn MOre
You might be interested in:
Health Reimbursement Account
A Health Reimbursement Account (HRA) is a tax-advantaged account that helps you save money on health care expenses.
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Health Savings Account
A Health Savings Account (HSA) is a tax-advantaged account that helps you save money on health care expenses.
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