Flexible Spending Accounts
A Flexible Spending Account (FSA) is a tax savings program that the Federal Government allows your employer to sponsor. It allows an employee to save federal, state, and Social Security taxes on the money you use to pay for eligible expenses. The tax savings will increase your take-home pay.
A Valuable Benefit
If you choose to participate in this valuable benefit, you and your eligible dependents can use your elected funds to pay for medical, dental, vision expenses, dependent care expenses, non-employer sponsored health insurance premiums, and/or adoption expenses on a tax-free basis.
Your Benefits Are Enhanced
Take advantage of a benefit choice that can increase your spendable income – a flexible benefits plan. You can enhance your benefits package by participating in this valuable option, available through your employer.
How It Works
This plan consists of up to five separate accounts – group insurance deductions, unreimbursed medical, dental, vision expenses, dependent care assistance plan, individual health premium account, and adoption expenses. Your employer may sponsor any or all of these. At the time of enrollment, you must determine how much you would like to contribute to each account offered by your employer for the coming plan year. You may participate in any or all of the accounts offered. When you participate in a flexible benefits plan, you elect to have a specified number of pretax dollars deducted from your paycheck each pay period. These dollars are subtracted from your gross earnings before taxes are taken out.
Your Spendable Income Increases
When you contribute pretax dollars to a flexible benefits plan, you lower your taxable income; therefore, you pay fewer taxes and increase your spendable income. Depending on your tax bracket, this plan can save you 30 to 40 percent on qualifying expenses.