What it means
You choose how much to put in during open enrollment, and the money comes out of each paycheck before taxes. The full yearly amount is usually available from the start of the plan year, even before it has all been deducted.
FSAs have a "use it or lose it" rule. Employers may offer either a grace period of up to 2.5 months or a limited carryover of unused money into the next year, but not both. The yearly contribution and carryover limits are set by the IRS and change most years.
Prescription medicines, including GLP-1s, are generally eligible expenses. Some programs for treating a diagnosed disease such as obesity may also qualify, while general wellness costs usually do not.
FSAs are tied to an employer and cannot be used with a Marketplace plan you buy yourself. If you leave the job, unused money may be lost, so plan contributions carefully.
Why it matters
Paying GLP-1 costs with pre-tax FSA money can lower the real price, whether or not insurance covers the drug.