An arrangement through your employer that lets you pay for many out-of-pocket medical expenses with tax-free dollars. Allowed expenses include insurance copayments and deductibles, qualified prescription drugs, insulin, and medical devices.You decide how much to put in an FSA, up to a limit set by your employer. You aren't taxed on this money.If money is left at the end of the year, the employer can offer one of two options (not both):You get 2.5 more months to spend the left over money.You can carry over up to $640 to spend the next plan year.Flexible Spending Accounts are sometimes called Flexible Spending Arrangements.Related:Learn more about FSA’s from the IRS, including allowed expenseLearn about Health Savings Accounts (HSA’s) – similar arrangements for people with coverage they bought themselves (not job-based plans)