What is the savings account set up through an employer that helps pay copayments, deductibles, and other costs not covered by the health plan?

• A. Flexible spending account (FSA)
• B. Health savings account (HSA)
• C. Individual retirement account (IRA)
• D. Savings Bond

Answer: (A)

A Flexible Spending Account (FSA) is an employer-established, pre-tax savings account you can use to pay for eligible medical expenses, including copays, deductibles, and other costs your health plan doesn’t cover. Money is set aside from your paycheck before taxes, which lowers your taxable income and helps you save on healthcare costs. Typically, funds must be used within the plan year (with some plans offering a grace period or small carryover), so it’s important to estimate expenses for the year carefully. In contrast, a health savings account is usually tied to a high-deductible health plan and belongs to the individual, with funds that can roll over and stay with you across jobs. An IRA is for retirement savings, not day-to-day medical costs, and Savings Bonds aren’t a healthcare payment tool.