WHAT IS AN FSA
Sometimes referred to as a Cafeteria Plan, Flex Plan, or Section 125 Plan— a Flexible Spending Account allows you to set aside a certain
amount of your earnings into an account before paying income taxes. If you are one of many people who spend money on out-of-pocket
medical expenses, an FSA can make these expenses more affordable. During the year you have access to this account for reimbursement
of expenses you regularly pay out of pocket. When you use tax-free dollars to pay for these expenses, you realize an increase in your spending power and substantial tax savings.
MEDICAL FSA
A medical FSA refers to a medical reimbursement plan that is a “flexible spending
arrangement” (FSA). This arrangement gives employees coverage under
which certain expenses may be reimbursed. Employees can use a medical FSA to
pay for medical expenses that are not reimbursed through insurance or any other
arrangement. Please refer to the sample list of eligible expenses located on the
lower right hand side. For a detailed list, please refer to the list of expenses located
on our website. (Note: medical FSAs cannot reimburse insurance premiums.)
Contribution Limits: Annual limits are set by your employer. However, the IRS
imposes a $3,200 cap on annual salary reductions (may be increased each year). There may be a minium contribution.
USE-IT OR LOSE-IT
If you do not use all the dollars contributed to the reimbursement account by the end of the plan
year, remaining funds will be forfeit- ed to the plan.
