What is a Flexible Spending Account?
Sometimes
referred to as a cafeteria plan, flex plan, or a Section 125 plan,
a Flexible Spending Account (FSA) lets you set aside a certain
amount of your paycheck into an account - before paying income
taxes.
During the year, participants have access to this account for reimbursement
of expenses that insurance does not cover. For example:
- Deductibles, co-pays, and other eligible
expenses not covered by insurance
- Prescription drugs and medical supplies.
- Over-the-counter drugs that are medically necessary like
allergy medications, aspirin, or antacids
- Dental services, orthodontics, and dentures (Please see
other specific information regarding orthodontics)
- Eye surgery, glasses, contacts and contact lens solutions
- Weight-loss programs if prescribed by a physician for a
medical condition
- Chiropractic services. Psychiatric care and psychologist's
fees.
- Smoking-cessation programs
- Adult and child daycare services
When you use tax-free dollars to pay for these expenses,
you realize an increase in your spending power, and substantial
tax savings.
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