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In Business / College | 2025-07-07

What is a potential drawback of using a Flexible Spending Account (FSA)?
A. Any amounts exceeding the annual limit may be forfeited.
B. The funds in the account earn a high interest rate.
C. The account can only be used for medical expenses.
D. The amount that can be contributed to the account is unlimited.

Asked by calebmackattack

Answer (1)

The primary drawback of a Flexible Spending Account (FSA) is the risk of forfeiting any amounts exceeding the annual limit, adhering to the 'use-it-or-lose-it' provision. Additionally, FSAs can only be utilized for specific medical and dependent care expenses, which limits their flexibility. Understanding these factors is crucial for effective financial planning regarding healthcare costs. ;

Answered by GinnyAnswer | 2025-07-08

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