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Flexible Spending Arrangements (FSA)

When You Participate in a Flexible Benefits Plan

  • You can choose to set aside part of your wage to pay for certain medical expenses and/or dependent care expenses.
  • Your wage goes in a special account and you do not pay taxes on this money.
  • When you incur medical or dependent care expenses, you will be reimbursed funds from your account.
  • The benefit of participating in the plan is a substantial tax savings on these expenses.

There are two types of accounts available - Health Care Expense Reimbursement and Dependent Care Expense Reimbursement.

Health Care Expense Reimbursement - expenses for health care that are not covered by insurance or reimbursed by any other plan. For example, office visits and prescription copays, dental expenses, prescription eyeglasses, contacts, and chiropractic care. The maximum benefit is determined by your employer. This plan covers expenses for you, your spouse, and dependents. The 1040 tax return allows deduction only for expenses that exceed 7.5% of your income. Most often, individuals do not qualify for any medical expense to be deducted. Reimbursement is based on the amount of the expense incurred, up to the annual elected amount.

To learn more about our Section 125 Flexible Benefit Plans, view the PDF information available or contact our Marketing Department.