Your employer offers two tax-advantaged FSAs: the Health Care FSA and Dependent Care FSA. Both FSAs are administered by Alight Smart-Choice Accounts.

Health Care FSA

A Health Care FSA allows you to set aside dollars from your pay on a pre-tax basis to reimburse yourself for qualified medical, dental, and vision expenses.

The Health Care FSA contribution limit is $3,300 for 2025. Once you enroll and set your annual contribution, you cannot change that amount during the year (except in the case of certain qualified life events).

With the Health Care FSA, you can roll over up to $660 from year to year. Any funds above that amount are forfeited, so it is essential that you carefully estimate the amount to contribute each year.

Wondering what the difference is between a Health Savings Account (HSA) and Health Care FSA? Find out.

Limited Purpose Health Care FSA

If you enroll in the Bronze, Bronze Plus, or Silver coverage level, you can use an HSA, both an HSA and a Limited Purpose Health Care FSA or if Medicare eligible, a Health Care FSA. If you contribute to an:

• HSA or Health Care FSA, you can use your account to pay for qualified medical, dental, and vision expenses.
• HSA and Health Care FSA, your Health Care FSA will be “limited purpose” and can only be used to pay for qualified dental and vision expenses. Your HSA can be used for qualified medical, dental, and vision expenses.

If you enroll in the Gold or Platinum coverage level, you can use the Health Care FSA to pay for qualified medical, dental, and vision expenses.

Dependent Care FSA

A Dependent Care FSA may be used to reimburse yourself for qualified child and dependent care expenses. You may use this account without being enrolled in medical coverage.

The Dependent Care FSA contribution limit is $5,000 (or $2,500 if you are married and filing taxes separately) for 2025. Once you set your annual contribution when you enroll, you cannot change that amount during the year (except in the case of certain qualified life events).

And, with the Dependent Care FSA, you lose any unused money at the end of the year, so it's important that you carefully estimate your anticipated eligible expenses for the coming year.

Things to Consider

When deciding whether to enroll in FSAs, be sure to consider the following:

Tax savings
Do you have moderate to high health care or dependent care expenses? If so, an FSA could help reduce how much you pay in taxes.

Your expected expenses
Carefully estimate your anticipated eligible expenses for the coming year. You should only set aside FSA dollars you know you will be able to use on eligible expenses.