Idaho Life Producer Practice Exam

According to the ACA, what is the maximum contribution an individual can make to a Flexible Savings Account?

1. $1,000

2. $2,000

3. $2,500

4. $5,000

The correct answer is: $2,500

The correct answer reflects the contribution limits set by the Affordable Care Act (ACA) for Flexible Spending Accounts (FSAs). As of recent guidelines, the maximum contribution an individual can make to a Flexible Spending Account is indeed $2,500. This limit applies to the tax year and is subject to change based on inflation or legislative adjustments, but for the purposes of this question, $2,500 is the established maximum for individuals. Flexible Spending Accounts allow employees to set aside pre-tax dollars to pay for eligible medical expenses, which can provide significant tax savings and financial flexibility in managing healthcare costs. It's important for individuals to be aware of this limit when planning their contributions, as contributing over the set limit can result in tax implications. The other options provided do not reflect the correct limit, making $2,500 the accurate choice based on the standards set by the ACA. Understanding these limits is crucial for proper financial planning and compliance with tax regulations regarding healthcare spending.