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What is a “flexible spending account”?

Similar to an HSA, a flexible spending account allows you to set money aside in an account to be used during the plan year plus 2 ½ months for medical expenses, free from payroll taxes. The money must be used during that time, and any unused funds can be used for future plan administrative costs, or returned to the employee as taxable income. The maximum allowed per plan year in contributions is $2,500.



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