Section 125 Flexible Spending Accounts – FSA

Participation in a Flexible Spending Account is the easiest way to increase your take home pay. Because these accounts allow you to use pre-tax dollars to pay for eligible expenses, you can save 30% or more on the cost of many out-of-pocket medical expenses.

Items such as prescription medications, prescription eyeglasses, contact lenses, uninsured dental expenses, as well as day care costs for children under 13, are just a few of the expenses you can pay for with pre-tax dollars by participating in a Flexible Spending Account.

Each year you decide how much you expect to spend during the year on medical and/or dependent care expenses, then you have this amount deducted from your paychecks on a pre-tax basis over the course of the year.  Because no payroll taxes are paid on these amounts, you end up saving 30% or more on all items your purchase with these “Flex” dollars.

Planning ahead is important, however, since you may only change your election if you have a Qualified Status Change and the IRS requires that you use the money that you elect to set aside for the year within that year or forfeit any unused balance(s). More Information

Your employer may sponsor any of the following Flexible Spending Account Benefits. (Check with your HR Department to see which benefits are offered).

Health FSA
This benefit can be used to pay for prescription drugs and eligible medical, dental and vision expenses for you and your qualifying dependents, as long as these expenses are not covered by any other insurance plan.

Limited Purpose/HSA Compatible Health FSA
If you participate in a Health Savings Account, your employer may offer a Limited Purpose, HSA Compatible, Health FSA. The limited purpose FSA is designed to be compatible with participation in Health Savings Accounts by limiting the expenses that are eligible to be reimbursed from this account to vision and dental care expenses not covered by other insurance.

Dependent Care FSA
This benefit can be used to pay for child day care expenses incurred while you (and your spouse, if married) are working, or while your spouse is a full-time student. Qualifying children must be under the age of 13. The benefit can also be used to pay for the care of a disabled dependent, or an elder dependent, while you and your spouse are working.

Premium Reimbursement Account
This benefit allows you to be reimbursed for premiums you pay for certain individually owned insurance policies.