What is an employer-administered account that lets employees save for health expenses?

A flexible spending account (FSA) is an employer-administered account specifically designed to allow employees to set aside pre-tax dollars to pay for eligible health expenses. This includes costs such as copayments, deductibles, and certain medications. By using an FSA, employees can reduce their taxable income while saving for healthcare-related costs, making it a financially savvy option for managing medical expenses.

In contrast, other options do not serve the same purpose. A 403(b) plan is a retirement savings plan primarily for employees of public schools and certain tax-exempt organizations, not for health expenses. A pension plan is a retirement plan that provides predetermined payouts to retirees, and while it contributes to an employee's long-term financial health, it does not specifically address health expenses. A health savings account (HSA) also helps individuals save for medical expenses, but eligibility is contingent on having a high-deductible health plan, which makes it distinct from an FSA. Thus, the flexible spending account is specifically tailored for direct health-related savings.