Flexible Spending Accounts (FSA's) are employee-funded accounts that can be tapped by account holders to pay for medical expenses that are tax deductible, but not reimbursed by any other source, as well as dependent care costs. Contributions to the accounts come from an employee’s pre-taxed salary; the government does not make a contribution.
OPM's website http://www.opm.gov/healthcare-insurance/flexible-spending-accounts/ has more information (i.e., who is eligible, when can one enroll, what are the restrictions).
For the latest Use or Lose Guidance, please consult this 2014 DCPAS Memorandum
For further information, visit www.FSAFEDS.com (external link) or call 1-877-372-3337. TTY 1-800-952-0450.