New Job, New Benefits: Should You Use an FSA?

Written by: Therese (she/her)

2 min read | Published: October 6, 2026

A person paying for a purchase at a pharmacy counter using tap-to-pay

Starting a new job often means making decisions about benefits you may have never used before. This typically occurs during the onboarding period for a new job; it may also occur annually during a period referred to as open enrollment, where employees may select from the benefits their employer offers. Somewhere between choosing health insurance and setting up your retirement contributions, you may see an option for a Flexible Spending Account (FSA).

So, what is it, and should you sign up?

What is an FSA?

An FSA is an employer-sponsored benefit that lets you set aside money from your paycheck to pay for eligible healthcare expenses.

The biggest perk? Tax savings. Your contributions generally come out of your paycheck before federal income and employment taxes are calculated. If you’re already going to spend money on prescriptions, copays or new glasses, an FSA can help you pay those expenses with tax-advantaged dollars.

For 2026, employees can contribute up to $3,400 to a health FSA. However, your employer may set a lower limit.

What can you use it for?

FSA funds can cover a surprisingly wide variety of eligible expenses, including:
Doctor visit copays and deductibles
Prescriptions and many over-the-counter medications
Dental care
Eye exams, glasses and contact lenses
Menstrual care products
Certain mental health services and treatments
First-aid supplies and certain medical equipment
Eligible sunscreen

Not everything health-related qualifies, so you may consider checking your plan or IRS guidelines before making a purchase.

What’s the catch?

The biggest downside is the use-it-or-lose-it rule.

Generally, money left in an FSA at the end of the plan year is forfeited. This differs from other specialized benefit options, such as Health Savings Accounts (HSA), where funds can continue to build over time. Although, your employer may offer a grace period or allow some unused funds to carry over for your FSA. For 2026, plans that offer a carryover can allow up to $680 to roll into the following year.

Should you use one?

An FSA can be a great option if you have predictable healthcare expenses.

You may think about what you know you will spend over the next year. Do you regularly buy contact lenses? Do you take a prescription drug every month? Do you have recurring doctor visit copays? Do you know you’ll need dental work?

Since you don’t have to contribute the maximum into the account, you can add up the expenses you’re expecting and consider contributing only around that amount. Also, if you’re new to FSAs, estimating conservatively can help you get the tax benefits without scrambling to spend leftover money at the end of the year.

The bottom line

An FSA can be a valuable workplace benefit when you use it strategically. Before skipping it during open enrollment, take a few minutes to estimate your expected medical, dental and vision expenses. You may already be spending money on things that could qualify.