Flexible Spending Accounts let employees set aside pre-tax earnings into accounts to fund health care and dependent care expenses. Which benefit is this?

• A. Long-Term Disability Insurance
• B. Life Insurance
• C. Short-Term Disability Insurance
• D. Flexible Spending Accounts

Answer: (D)

Think about a tax-advantaged way to pay for out-of-pocket health and dependent care expenses. Flexible Spending Accounts are exactly that: employer-provided plans where you contribute pre-tax dollars into an account to cover qualified medical and dependent-care costs. This setup lowers your taxable income for the year while giving you funds specifically for eligible expenses, which is why it matches the description given. The other options describe insurance types that provide income replacement or a death benefit, not a pre-tax spending account used to pay expenses, so they don’t fit this scenario.